Is My Company's Gratuity Calculation Fair? Seeking Advice on Probation Deduction

Advice Needed on Gratuity Calculation

I joined in October 2004 and worked until May 2014. I was hospitalized and on medical leave from June 2010 until December 2010. My company is paying me gratuity for the period from 2004 to 2010 after deducting my probation period of 6 months. Can someone advise whether they are correct in the calculation or wrong?

If you were continuously in the service of the organization until 2014, even if you were admitted to the hospital, they should pay you the gratuity until 2014. However, if you resigned or your services were terminated even for a single day, they have the authority to pay you the gratuity only until your continuous service period. At most, they can deduct the gratuity for the period you were on leave.

I agree with Shweta. You are eligible to receive the gratuity amount for the entire period you were working with the company.

Gratuity Act 1971: Applicability and Eligibility

The Gratuity Act 1971 is applicable only to establishments in India. If you are employed in the UAE, as your profile indicates, please check with the respective labor laws authority of that country. However, if you are employed in India, as per the law, you should be entitled to gratuity payments until 2014. Unfortunately, many companies manipulate these laws, which is why I always advocate for revising them. To put it bluntly, these are "Unfair Practices of HR." Now, let's address your case.

Eligibility for Gratuity

As per the law, the eligibility for continuous years of service to qualify for gratuity is 5 years. Here are the requirements for claiming gratuity:

- Most importantly, the employee should have worked for not less than five years for the employer.
- Gratuity is calculated as follows: (Basic + DA) / 26 X 15 X Number of Continuous Years Worked.
- A continuous year is defined as 190 days of work if working below ground (like mines, etc.) and 240 days if working above ground, including strikes, lockouts, and any short temporary closures due to glitches.

Your Case Analysis

Your HR considered 2004 to 2009 as a period of gratuity, and since you meet all the criteria for that period, your gratuity is clear. However, due to your one-year break for medical leave, your HR and company deemed your second term from 2010-2014 ineligible for the 5-year requirement. While this is as per the law, it can be strategically and legally challenged on any fair platform for justice.

1. You need to prove the nature of your medical leave—whether it was continuous or intermittent, or if you were on Leave Without Pay (LOP), etc., to show that your association with the organization was not cut.
2. You did not resign and rejoin as a new employee.
3. You worked from 2004 to 2009 and from 2011 to 2014, specifically from January/March 2009 to November 2009 (for the year 2009-10) and January 2011 to March 2011 (for the year 2010-11) continuously until 2014.

Request the HR and company to reconsider their decision. If not, seek professional help to find a solution. Try hard.

Regards.

Thank you all for your comments. I was not terminated, and I did not leave the company in 2010. After recovery, I rejoined the company. I am in touch with HR and accounts to correct my gratuity calculation.

My company is not ready to pay me gratuity for my full tenure of 10 years. They mailed me a check for gratuity for 5 years from 2004 to 2010. They considered the salary that I used to get in 2010. I have not cashed the check and have been following up with my employer through emails regarding my gratuity. However, they never reply to my emails.

Next Steps for Gratuity Issue

Please let me know what should be my next step. My company is in Noida. Please advise.