Am I Eligible for Gratuity After 4 Years and 203 Days in a 5-Day Workweek?

Hi all,

As per the Gratuity Act, I see that 4 years and 190 days is sufficient for one to become eligible for gratuity in a company that operates for less than 6 days. I have served for 4 years and 203 days in my company, which operates 5 days a week.

Please clarify whether I'm eligible for gratuity or not...?

You are not eligible for gratuity for service less than 5 years. In some judgments, under specific circumstances, courts have granted gratuity for service less than 5 years, which cannot be taken as a rule.

Dear Mr. Mahesh,

Please provide me with your date of joining and date of leaving for me to review.

Thank you.

Hi, sir,

My date of joining is 6th December 2010, and my date of relieving is 29th June 2015.

The basic rule of entitlement to gratuity is 5 years of continuous service in an establishment. However, 5 years does not mean exactly 5 years—it could be even 4 years and 240 days or 4 years and 190 days, depending on the type of establishment and the number of working days in a week.

Relevant Sections of the Payment of Gratuity Act

Relevant sections of the Payment of Gratuity Act are Section 2 and 2A. Section 2A defines continuous service.

Payment of Gratuity

Section 4 of the same act defines the payment of gratuity as follows: 1) Gratuity shall be payable to an employee on the termination of his employment after he has rendered continuous service for not less than five years, (a) on his superannuation, or (b) on his retirement or resignation. Continuous service is clarified in Section 2A. Thus, Section 4 needs to be read along with Sections 2 and 2A for better understanding.

No Mahesh, it's 4 years and 240 days, and that too in a few states where the state courts have given any judgments. However, for other states, the law is the same for 5 years. Hence, you are not eligible for gratuity.

Eligibility for Gratuity Under the Act

The Act states that one must complete 5 years of continuous service from the date of joining to the date of leaving the service, with certain exceptions. Working 240 days during a period of 365 days will be considered as a completed year only if 365 days have elapsed during the year in question.

For example, the period from 6th December 2014 to 29th June 2015 is not a full 365 days. However, if you had worked 240 days from 6/12/2014 to 5/12/2015, with the last working day being 5/12/2015, then working 240 days during this period is sufficient for it to be considered as one completed year.

The Madras High Court judgment is not relevant in this case.

The minimum requirement for gratuity is 5 years. The Madras High Court gave a judgment stating that 4 years and 240 days of working are enough for gratuity. The Supreme Court has not provided any judgment on this matter. Therefore, apart from Madras, other states require 5 years of service.