Can We Release Gratuity for a Home Purchase While Employee Stays On? How to Handle It

We are a Mumbai-based Pvt Ltd Co. One of our employees, who is in need of funds for the purchase of a home, has requested us to release his gratuity amount, which is due as of today. He is not leaving the job and will continue working with us in the future.

Intermittent Gratuity and Calculation

Is intermittent gratuity allowed, and how is the calculation of gratuity done now and in the future when he actually leaves?

Documentation Requirements

What documents should be taken from him so that he does not claim any extra amount for the years the gratuity is already paid?

Thanks,

Ravi

Gratuity is to be paid on termination of employment and not in between.

5 years of continuous service is the period of employment that entitles one to claim gratuity upon termination of the job.

As per the Gratuity Act, you can give gratuity when the person leaves or is terminated after working for 5 years. If you pay him now, that is not gratuity, and he will be entitled to full gratuity again later. No document you take from him will be of any use.

The employee is not allowed to contract away his rights to payment granted by a statute.

Gratuity, being a specific terminal benefit, is actually a kind of insurance against one or the other specified types of termination of employment of the employee from the services of the same employer. Unless and until the termination of employment happens in the manner prescribed in the Act, the right to stake a claim for gratuity or an obligation to satisfy it will never arise. Hence, your question is infructuous in the face of the scheme of gratuity contemplated under the Payment of Gratuity Act, 1972.

Regards