Payment Of Gratuity/ Ex-gratia When Worked For Less Than 5 Years And Gratuity Is Part Of CTC

I have worked for a large organisation for four years and five months and as such less than the period stipulated under the Payment of Gratuity Act, 1972.
However, as per the terms of appointment, gratuity is included in my CTC and a specified amount which is not paid during the employment period. It is also stated that it is payable subject to the rules and rules interalia refers to the stipulated period of four years and 190 days.
Would this gratuity become payable as 'ex-gratia' to me even if I have not completed the stipulated period of five years since it is included in my CTC?

Gratuity becomes payable if you serve 5 continuous years in the organisation.
In your case service is only 4.5 years.
In my opinion you are not entitled for gratuity,even if gratuity is included in CTC.

Thanks for the reply.
Is it not unfair and illogical to apply 5 years' period even if gratuity is part of the committed CTC and a specific amount is allocated towards the said gratuity. Also, though specified separately, it is not paid during the continuance of employment. There was no need to mention this in the compensation package as gratuity will otherwise also become payable after five years.
I received ex-gratia (instead and in place of gratuity) from my previous employer where I worked for two and half years. There also gratuity formed part of my CTC.

Mr Shah,
Please understand CTC as applicable to any employee.
Cost to company is an amount forecast by a company a salary but is not the same as received by the employee.
Gratuity legally becomes payable only after 5 years of continuos service.
Ex gratia payments are those payments which have no legal compulsion while gratuity is legally mandated.

The term CTC is little confusing and most of the organisations today make CTC as offer. They include Grtuity without specifying conditions regarding Gratuity.. We need to find a legal answer to this question only by moving court
This Obviously can not be claimed under the Payment of Gratuity Act. But surely this forms part of employment contract and is governed by the Indian Contract Act. In my opinion, if there is no condition specified like gratuity under The Payment Of a Gratuity Act 1972 or payable if one completes 5 years, then one can reasonably presume that this component is payable under Contract of Employment. No one has gone to the Court yet and one needs to move Civil Court for this purpose.

CTC
What you see is not always what you get.Especially in case of CTC.
Basically one needs to understand that CTC is what the company says it will spend on you; the take-home is the amount you get in hand after tax.
When an employee joins a company,the company proceeds on an assumption that he will be there for few years.
Therefore including legal payments which may arise after a few years is also included for making provision for subsequent payments,if they arise.
I feel there is need for people to read the CTC package carefully and then accept the offer if they feel are satisfied.

Supplementing what Mr. Nathrao has mentioned above, candidates who look at the total package assume that they will get the entire amount (CTC) in some form or the other. However, there are riders to it. It is like applying for a credit card. We do not read and understand what the clauses and conditions incorporated. We do not ask pertinent questions and seek clarifications. If we do that, such problems do not arise. However, some components in CTC goes by certain assumptions. Therefore, before signing on the dotted lines, better, read and understand and get satisfied and convinced !

I would like to put up this issue in different angle.
COST TO COMPANY is basically internal document / working of the orgnisation which covers the legal obligations and it's liabilities. It gives clear ideas to both the parties i.e. orgnisationa and employee and it is a part of the appointment letter / contract.
Now the question is the reason of leaving of service before completion of 5 years. If employment terminated / retrenched / closed by the Co. then Retrenchment compensation is required to pay by the co. to employee. Which is as good as Gratuity amount even though the services are below 5 years. [which never considered or mentioned in CTC]. If employee left the job on his / her own before 5 years of services no Gratuity is applicable.
Hence unless and until the specific understanding in writing, the indirect benefits / costs even though mentioned in CTS are payable as per the Law only.
Regards
Pramod Thakar

Gratuity becomes payable if you serve 5 continuous years in the organization.
I received ex-gratia (instead and in place of gratuity) from my previous employer where I worked for 4.3 years. There also gratuity formed part of my CTC.

He may raise suit in civil court terms of contract but it is not enforceable as per gratuity act