Seeking Clarity on Gratuity: Is It Really Payable After 4 Years and 240 Days?

Respected Seniors, Time and again, by quoting your various opinions that GRATUITY is payable at the first instance only on completion of 5 (five) continuous years of service and certainly not on completion of 4 years... 240 days plus... You have clarified many times that these 240 days are to be considered as one full year only from the sixtieth year of service onwards. I am sure The Payment of Gratuity Act has not been amended to 4 years + 240 days' effect. I need one last clear, updated opinion from you all.

Thanks in advance and with the best personal regards,

B. Sundararaman SGS Ventures [Email Removed For Privacy Reasons] HR, IR Consultant

Understanding Gratuity Eligibility Under the Gratuity Act 1972

As per the Gratuity Act 1972, eligibility for gratuity is 4 years plus 190 days for employees who work in mines or companies that operate 5 days a week. Additionally, it is 4 years plus 240 days for employees working in companies with a 6-day workweek.

Most people mistake it for 5 years, per se. Please note that it is 240 days, not 240 working days. Leaves, sickness, etc., are also to be included in the period of 240 days.

Hope this answers your query.

Even though there is a Madras High Court judgment on the 4-year and 240-day clause for eligibility for Gratuity, once 240 days have been crossed in the 5th year, the employee is eligible for Gratuity. That is the verdict of the Madras High Court.

Regards,
R Sudhakar

There is only one case law regarding eligibility to receive gratuity for 4 years and 240 days. Members can apply for gratuity and should receive payment within one month. Failing which, they can file a suit against the company in the labor court and seek justice.

Thanks,
Vidyadhar Bhat

I am fully in agreement with Sundaram 1959's opinion on gratuity eligibility. To be eligible for gratuity, an employee must serve a minimum of 5 years. The question of working 240 days in any year arises only after the entitlement to gratuity. In a case where, in any year after becoming eligible for gratuity, an employee has remained absent or on LWOP, the question of 240 days of working comes into operation.

I have not seen the Madras High Court judgment in detail. However, if there is any such judgment, it will apply only to the jurisdiction of the Madras High Court. Industries in other states will not be required to follow this judgment.

Judgment of the Hon'ble High Court of Madras

The judgment of the Hon'ble High Court of Madras is binding only on the subordinate courts in Tamil Nadu. It will not be binding on the courts in the rest of India.

As per the provisions of the Payment of Gratuity Act, continuous service of 5 years is a must.

Regards

Judgment of the Hon'ble High Court of Madras

The judgment of the Hon'ble High Court of Madras is binding on the subordinate courts in Tamil Nadu only. It will not be binding on the courts in the rest of India.

Provisions of the Payment of Gratuity Act

As per the provisions of the Payment of Gratuity Act, continuous service of 5 years is a must. From the sixth year onwards, 240 days will be taken into consideration.

Regards,
Narra Lokanadha Babu
Manager-HR

I worked for 4 years and 283 days as a Senior Manager in a Publishing company. They denied my gratuity, taking advantage of the gratuity law of 5 years. I filed a case with the labor authority in Pusa Road.

I have taken the case to the Madras High Court, which clearly stands in my favor. However, the authority is asking for any similar case in the Delhi High Court or Supreme Court. Could you help me in searching for it?

Thanks,
Sanjay Malhotra
+919811548594

Dear Smalloo,

You have to file your Gratuity Claim before the Assistant Labour Commissioner/Controlling Authority. You justify your eligibility based on the judgment you have referred to. The Authority has to adjudicate the matter and pronounce judgment based on the available material on record.

Thank you.

There is any case of 4 years and 240 days in Delhi high court or Supreme Court to support my case. Could you share the pdf.

Corrected:

Is there any case of 4 years and 240 days in the Delhi High Court or Supreme Court to support my case? Could you share the PDF?