Gratuity Dilemma: Is Payment Required if an Employee Dies Before 2 Years of Service?

If an employee, who had completed only 1 year and 8 months of service, passes away, does the employer have to pay gratuity to the nominee?

Employee Date of Joining: 01/01/2012
Date of Death: 10/08/2013

If yes, how should the calculation be done? If no, please provide the reason.

Kindly do the needful.

Regards

Yes, the employer is statutorily liable to pay Gratuity. The calculation is given below:

Gratuity Computation

Gratuity computation: Last Basic + DA x length of service (2 years) x 15/26

Hope you got the answer to your query.

Regards,
SS NEGI

Could you please provide me with any documentation or proof regarding gratuity payable in the event of death within two years of service?

Thank you in advance for your assistance.

Kind regards

I don't think the employer has to pay gratuity for an employee's demise. Gratuity is paid only to employees who have worked for more than 5 years, but there is a provision for disablement. The law states:

Payment of Gratuity

4. Payment of gratuity.- (1) Gratuity shall be payable to an employee on the termination of his employment after he has rendered continuous service for not less than five years:
- (a) on his superannuation, or
- (b) on his retirement or resignation, or
- (c) on his death or disablement due to accident or disease:

Provided that the completion of continuous service of five years shall not be necessary where the termination of the employment of any employee is due to death or disablement:

[Provided further that in the case of the death of the employee, gratuity payable to him shall be paid to his nominee or, if no nomination has been made, to his heirs, and where any such nominee or heir is a minor, the share of such minor shall be deposited with the controlling authority who shall invest the same for the benefit of such minor in such bank or other financial institution, as may be prescribed, until such minor attains majority.]

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