How Do Medical Leave Without Pay Affect Pension and Gratuity Calculations?

My friend has been working with a bank for the last 18 years. He has taken 3-4 major leave breaks totaling around 5 months, all on medical grounds. These leaves, taken in the late 1990s, were then translated to LWP (leave without pay). All said LWPs were suitably approved (on paper) by the management and HR, with a condition that the increment date be delayed/deferred by the number of LWPs. This meant that if the annual increment date was on 15th February, it would be delayed by 5 months owing to LWP taken.

My friend has been perfectly regular in the last 8-9 years and has gathered a good leave balance now.

NOW, MY QUESTION IS:

1) Will this LWP be considered as part of the total service when calculating the pensionable service, eligible gratuity, or superannuation?

I understand that such LWPs (duly approved) on medical grounds do not amount to a break in service. For confirmation, I ask you: will this LWP be counted as part of continuous service for calculating the pensionable service period or gratuity or superannuation?

Please provide definite (sureshot) views, backed by law/rules.

Thanks,

Regards,
NIRAVKB

I await expert views from all, including Mr. Abbas P. S, who champions such matters. Briefly, the query is: Is approved LWP (on medical grounds) considered a part of continuous service? Will it be included when calculating total service (for computing gratuity, pension, superannuation, and other purposes)?

Await your views.

Regards,
Niravkb

I suspect Mr. Abbas has answered this question many times in the past. The information you have provided is incomplete. The provisions of a pension depend on the bank and the pension scheme that they have. Unless that information is available, no one will be able to give you a proper answer.

If you are talking about a pension under the PF Act, then this will not be counted as a service break, and you will be eligible for the pension for the entire period. There may be some reduction on account of less amount being credited to your account.

Regarding graduating, since the company has approved the leave, even LWP, it will not be considered as a service break. I do not think the company will even count it as less than a year unless you have a really vindictive HR person in the branch. Mostly banks do not bother with minor things like this unless you have done something wrong before leaving.

Thank you, Saswata. My primary concern about whether that will be counted as a service break is answered. If they do, my gratuity may get affected by the consequent reduction in the total number of serviced years. Likewise, it will matter when counting the number of years required to reach pensionable service (of 28 years).

I would appreciate more views from others to get a wider or a different perspective—if at all, there is one. Any addendum from Saswata is also welcomed.

Thank you.