Gratuity Entitlement After Employee's Death: How to Handle Short-Term Employment Cases?

One of our employees worked with us for 4 months and then went on leave as she was unwell. She was supposed to resume but unfortunately, she passed away.

Gratuity Entitlement Query

a) Is she entitled to gratuity? As she worked for only 4 months. According to the Gratuity Law, in the event of death, the gratuity amount is payable to the nominee. However, what if the employee has worked for less than a year? Would she still be eligible for gratuity benefits?

Gratuity Calculation Methods

b) How should we calculate gratuity? Some members have mentioned in previous posts that it should be calculated until retirement age, while others suggest it should only be given based on the duration of employment.

I kindly request all seniors to provide guidance on the above issue.

Thanks & Regards

Continuous Service Definition

Where an employee (not being an employee employed in a seasonal establishment) is not in continuous service within the meaning of clause (1), for any period of one year or six months, he shall be deemed to be in continuous service under the employer:

- For the said period of one year, if the employee during the period of twelve calendar months preceding the date with reference to which calculation is to be made, has actually worked under the employer for not less than:
- One hundred and ninety days, in the case of an employee employed below the ground in a mine or in an establishment which works for less than six days in a week; and
- Two hundred and forty days, in any other case.

- For the said period of six months, if the employee during the period of six calendar months preceding the date with reference to which the calculation is to be made, has actually worked under the employer for not less than:
- Ninety-five days, in the case of an employee employed below the ground in a mine or in an establishment which works for less than six days in a week; and
- One hundred and twenty days, in any other case.

Explanation

For the purposes of clause (2), the number of days on which an employee has actually worked under an employer shall include the days on which:

- He has been laid-off under an agreement or as permitted by standing orders made under the Industrial Employment (Standing Orders) Act, 1946 (20 of 1946), or under the Industrial Disputes Act, 1947 (14 of 1947), under any other law applicable to the establishment;
- He has been on leave with full wages, earned in the previous year;
- He has been absent due to temporary disablement caused by an accident arising out of and in the course of his employment; and
- In the case of a female, she has been on maternity leave; so, however, that the total period of such maternity leave does not exceed twelve weeks.

Regards,
Tushar Swar