Am I Eligible for Gratuity with Just Under 5 Years of Service? Seeking Advice

Hi All,

Please, can you assist me with the minimum exact eligibility for the Gratuity claim? I know it is 5 years in general; however, I would like to know if I am eligible to claim it just in case if I am landing up with 4 years and 11 months.

Best Regards, Sriram S

This is one of the most frequently asked questions, and there are various views available on it.

Case Study: Madras High Court Ruling

In one case, the Madras High Court has held that an employee who has completed 4 years and 240 working days in the 5th year will be entitled to gratuity, i.e., 4 years, 10 months, and 11 days.

Example Scenario: Transfer Between Companies

In another case, let's consider an example: If an employee has worked in a company, ABC, for 3 years and due to some reason, he has been moved to company XYZ under the same management. The employee received his Full and Final from ABC Company but not the gratuity amount as he had not completed 5 years there. He then spent another 2.5 years in company XYZ and resigned. At the time of his Full and Final, will he be eligible for gratuity? Answer: Yes, as both companies are under the same management, and the employee has completed 5.5 years in total in both companies.

Please find attached a copy of the Madras High Court's decision on continuous service regarding gratuity.

Thank you.

Hey Sriram,

As per the Vishram, this is a very general question. The rule clearly states that an employee who has completed a minimum of 5 years will be entitled to the benefit of gratuity. However, the Madras High Court rule is only applicable there. So, commonly, you are only eligible for gratuity after finishing 5 years.