Gratuity is to be paid to an employee who dies before completing the qualifying service of five years. But the Act is silent with respect to any minimum service in the case of death. For the purpose of calculation of amount of gratuity a service period extending six months shall mean one year whereas service of less than six months shall be ignored. Therefore, if the deceased had worked at least for six months and a day, his dependents would have got gratuity calculated at the rate of 15 days wages/ salary. However, being a death case, even if the service of one day is considered, the gratuity will not be more than what one should get for one year, ie, 15 days salary.
The Payment of Gratuity Act has made it obligatory on the part of employer to get nominations from all employees who have completed one year of service. The purpose behind this provision is that if any employee dies, his dependents/ nominees should get gratuity without undergoing hassles. If the employer is to give gratuity to dependents of a deceased employee who worked for less than one year or two months, as in the instant case, there could have a provision that nomination should be collected from an employee as and when he joins the establishment, like ESI or EPF. In the absence of it and since there is a provision that nomination is to be collected from employees who have completed one year of service, the question of payment of gratuity to dependents of employee who died before one year of service is doubtful.
Regards,
Ashutosh Thakre