Am I Eligible for Gratuity with 4 Years and 240 Days of Service in a BPO?

Gratuity Eligibility Query

Date of joining is May 3, 2010. I will leave the organization on March 31, 2015. There is no break in my service. It is a BPO company, and I work 5 days a week. To complete 5 years, I have a shortage of one month and 3 days. HR has informed me that a minimum of 5 years is necessary. I have also heard that 4 years plus 240 days are sufficient. Can I claim for gratuity? Please advise.

Regards

Understanding the Payment of Gratuity Act 1972

The Payment of Gratuity Act 1972, Section 4(1), clearly states that after completing 5 years, you can apply for gratuity by submitting Form 1 to the employer. The employer has the right to reject your application by stating that you have not fulfilled the 5-year requirement.

If you take the matter to the Labor Court, you will be required to prove that you have worked for 240 days per year for 5 years to be eligible for gratuity. For example, payslips may indicate the number of days you were present, so you would need to present payslips for 5 years as evidence. If you have the necessary proof, you can proceed with legal action.

Thank you for the clarification. Payslips can be provided to my personal email. Please let me know the timeline for receiving the gratuity if I pursue it legally.

Filing a Complaint with the Labor Office

To address your concern, you need to file a complaint with the labor officer or commissioner. Subsequently, both you and your employer will receive a hearing notice within 1 to 3 months. If no resolution is reached in approximately one year at the labor office, the case will be referred to the labor court. The legal process in court may last from 2 to 4 years to reach a conclusion.

Filing Before Completing 5 Years of Service

In the event you file a complaint at the labor office before completing 5 years of service, they might reject your complaint. You must provide case references where the court has ordered gratuity payment despite an employee not completing 5 years. Once your complaint is accepted and a hearing notice is served to the employer, some employers might opt to settle the matter by paying off and closing the case.

Escalation to the Supreme Court

However, certain employers may choose to contest the case and escalate it to the supreme court level, considering it a matter of prestige.

Please read the Payment of Gratuity Act 1972. You are definitely entitled to the gratuity as you seem to have completed 4 years and 240 working days in the fifth year. If you indicate your knowledge of the Gratuity Act ruling to your employer, I am sure that they will decide to pay your due gratuity.

Regards

Gratuity Eligibility Under the Payment of Gratuity Act 1972

According to the Payment of Gratuity Act 1972 (New Amendment), the following rule is presently applicable:

The requirement of 5 years' service is outdated and no longer in existence. Please note the correct criteria:

• 4 years & 8 months / 240 days of continuous service
(or 240 days to be precise for organizations working 6 days a week), i.e., working from Monday to Saturday in the case of a BPO (6 days work culture)

or

• 4 years & 190 days / 6 months of continuous service
(in the case of an employee employed below the ground in a mine or in an establishment which works for less than six days a week), i.e., working from Monday to Friday in the case of a BPO (5 days work culture)

Referring to the above examples, your total period of service comes to:

• Date of Joining: 03/05/2010
• Date of Leaving: 31/03/2015
• Total Period of Service: 4 Years, 10 Months & 29 Days

Be firm and confident in your understanding now, and humbly go to the employer to claim your right, as you are entitled to Gratuity Payment under the Gratuity Act and Regulations.

Regards,
Swapna Samant

[Email Removed For Privacy Reasons]

I don't think there is an amendment to the above claim by Ms. Swapna. In the new amendment in 2010, the Government increased the ceiling limit from 3.5 lakhs to 10 lakhs. If you have any amendment copy claims of the above revisions, please let me know as well.

Gratuity Eligibility and Legal Judgments

The act clearly states the completion of 5 years. While there are some judgments like "Surendra Kumar Verma vs. Central Govt. Industrial Tribunal, [(1980) (4) S.C.C.433)]" that suggest completion of 4 years and 8 months, it likely takes a considerable amount of time to avail this gratuity through the court. Additionally, the employer always has the right to reject the claim if the employee requests gratuity without completing 5 years.

Thank you

You are right; the 5 years of gratuity clause is still existing (as I presently checked with the labor laws consultant in my network). I was slightly wrong in my earlier post. However, as per Gratuity Rules & regulations, any working employee who has completed the service period of a minimum of 4 years & 6 months, i.e., 4.6 years, 4.7 years, 4.8 years - up to 4 years 10 months, 4 years 11 months, or up to 5 years and more (exceeding) is absolutely eligible and entitled to receive a gratuity payment from the company. Gratuity is payable irrespective of whether you are terminated, superannuated, or resign, as long as you have worked for a continuous period of 5 years or more than 4 years and 6 months; the employer cannot deny paying the gratuity amount. You may complain to the labor commissioner of the area where you were working.

Regards,
Swapna Samant
[Email Removed For Privacy Reasons]

Yes, that is what I was saying. There was no amendment like that in the Gratuity Act. There were court orders, but they will be on a case-to-case basis. We can't take it as a global order. The employer has the right to reject the claim as the employee has not completed 5 years as per the act. However, the employee is always welcome to approach the Labour office to defend his claim as per court orders, and he has to prove that he has worked as per those court orders. If satisfied, the court may order the employer to pay the eligible gratuity.

Thanks

In the private sector, how will the implementation or effect of gratuity calculation occur? Please help me with this.

I am working for an organization that operates 5 days a week, and I joined the organization on August 30, 2010. I resigned on December 22, 2014, and I am serving a 3-month notice period, which will complete on March 20, 2015. As per the act, I should be eligible for gratuity on March 8, counting 190 days from my joining. What would you suggest in this close case? Should I go ahead and claim gratuity as per the below act of 190 days?

Section: 2A

Continuous Service

For the purposes of this Act:

(1) An employee shall be said to be in continuous service for a period if he has, for that period, been in uninterrupted service, including service which may be interrupted on account of sickness, accident, leave, absence from duty without leave...

(2) 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 –

(a) 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:

(i) 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

(ii) Two hundred and forty days, in any other case.