Gratuity for Employees Transferred Abroad: Do They Qualify Before 5 Years?

I am seeking views about gratuity payable to employees being transferred from India to another country.

Gratuity Rule in India

As per the gratuity rule in India, employees completing 5 or more years are eligible for gratuity payment. I would like to know whether a company is supposed to pay gratuity to an employee being transferred within a group company that has a separate legal entity from India to another country, even though he/she has not completed 5 years.

Request you to share your views along with proper supporting documentation like extracts of laws, sections, sub-sections, etc.

Thanks & appreciate your help in advance.

If you see the definition of continuous service, "Cessation of work not due to any fault of the employee" will be counted in continuous services, and the employer will be liable to pay gratuity for this period.

For the purposes of this Act, an employee shall be said to be in continuous service for a period if he has, for that period, been in uninterrupted service, including service which may be interrupted on account of sickness, accident, leave, absence from duty without leave (not being absence in respect of which an order treating the absence as a break in service has been passed in accordance with the standing order, rules, or regulations governing the employees of the establishment), layoff, strike, or a lock-out or cessation of work not due to any fault of the employee, whether such uninterrupted or interrupted service was rendered before or after the commencement of this Act.

Regards

You used the word "transferred" within a group company. When there is a transfer from one company to another, there is an understanding regarding the transfer of service. In your case, the transferee company is not from India. The employee who is being transferred to another company, which is not in India, is not governed by Indian laws. However, you can still have an understanding regarding the service, such as Gratuity, either to pay it now or otherwise. Also, you have to bear in mind what Prashant ji said in his response above.