Is It Fair to Exclude Unpaid Sick Leave from Gratuity Calculation? Seeking Advice!

Hi! I am working with a Pvt Ltd company since the last 8 years. Now, I have resigned from my post. I had taken unpaid leaves prior to maternity due to sickness for nearly 8 months. My management has informed me that this span will not be counted for gratuity. Is this fair? Are they being unjust to me? Please help me.

Eligibility for Gratuity During Unpaid Leave

The Payment of Gratuity Act clearly states that you are eligible for gratuity even during leaves (LWP) as long as they have been sanctioned.

The extract of Section 2A is given below for your reference:

[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 (not being absence in respect of which an order [***] treating the absence as a break in service has been passed in accordance with the standing orders, rules, or regulations governing the employees of the establishment), lay-off, strike or a lock-out, or cessation of work not due to any fault of the employee, whether such uninterrupted or interrupted service was rendered before or after the commencement of this Act.

So, if the company has not passed any order declaring the absence as a break in service but has sanctioned the leave as LWP, then you are eligible for the gratuity even for those 8 months.

Regards,
Ashutosh Thakre

Thank you very much, Ashutosh! One more thing I would like to know is if the span of probation is also considered or not. My company doesn't have proper HR. They tried to save money by making their own rules. Thanks once again.

Max 30 Days....

The gratuity should be paid within 30 days of the last working day of the employee.

Also, if you do not receive this, you can approach the gratuity cell in the labor office in your area to file a complaint about the same.

Regards, Ashutosh Thakre

Hi Nikasmi,

Thank you for your query in CiteHR regarding Gratuity. You have stated that you worked for 8 years in the company, of which 8 months were spent on LWOP due to sickness. The probation period can be 6 or 12 months. As rightly pointed out by senior members, the company cannot deny Gratuity on the above two grounds. Therefore, you are entitled to Gratuity.

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