Is Gratuity Due for an Employee with 4 Years and 7 Months of Service? Seeking Advice

Dear Experts, Please help me. Is gratuity payable to an employee who has completed 4 years, 7 months, and 7 days (joined on 01.08.2009 and relieved on 07.03.2014)?

Regards, Arati Mundaye

Hi Arati, for eligibility for gratuity, one needs to complete a minimum of 5 years, not even 1 day less from the date of joining. Only then will the employee be eligible for it. Hope I have solved your query.

Any employee who has completed 4 years plus a minimum of 240 days in the last year (fifth) is eligible for the Gratuity Act. Now, as per your query, he/she is not eligible for Gratuity payable.

Thank you,
JN Modi

The concerned employee must have completed continuous service of five years to become eligible to receive payment of gratuity as per the Payment of Gratuity Act. However, as this is a payment of gratuity, there is no restriction on the part of the employer for making payment.

Thanks,
R K Nair

Eligibility for Gratuity Under The Payment of Gratuity Act, 1972

As per paragraph 4 of The Payment of Gratuity Act, 1972, an employee becomes eligible for gratuity on completion of 5 years of continuous service. To calculate one year, please refer to Para 2A (2) (a). According to this, if an employee completes 4 years and 240 days of continuous service, he is eligible for gratuity.

Regards,
Mohan Kumar

Hi Folks, can you please let me know how the gratuity amount will be calculated and how much the employee will benefit after completion of the gratuity period and still continuing with the company?

Thanks & Regards,
Arjun Thakur

It appears that the concerned employee is not entitled to the payment of gratuity as it is payable to an employee upon the termination of their employment after rendering continuous service for not less than five years.

Eligibility for Gratuity Payment

Section 2A (Continuous service) stipulates that for the calculation of a one-year period, an employee must have worked for not less than two hundred and forty days in an establishment that operates for not less than six days a week during the twelve calendar months preceding the relevant date for the calculation. In such cases, an employee becomes eligible for the payment of gratuity.

As mentioned, the concerned employee has completed 4 years, 7 months, and 7 days. The duration of 7 months and 7 days equates to 217 days. The minimum requirement for entitlement to the payment of gratuity is 4 years and 8 months. Since there is a shortfall of 23 days, the employee will unfortunately miss out on the benefits.

Regards,
BS Kalsi

As per the provisions of the Gratuity Act, 1972, Para 2A, if any employee completes 4 years and 240 days of service, they will be eligible for the payment of gratuity.

The number of days for counting a year as per the Gratuity Act is 240. Hence, if you complete 240 days in 365 days in a year, you are eligible for one year. According to this, a person is eligible for gratuity by completing 240 days x 5 years. Therefore, if a person completed 4 years and 240 days in the 5th year, they are eligible for gratuity.

I have attached the High Court Judgment as a reference.

Regards,
Alphonse
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