Am I Eligible for Gratuity After 4 Years and 10 Months? Seeking Advice on Claiming It

I have worked in an organization for a period of 4 years, 10 months, and 25 days. The details are as follows:

Date Of Joining: 09-May-2009
Last Working Day: 04-Apr-2014

I am requesting my gratuity payment from 1 year because I came to know that I am eligible for gratuity. However, my company says that I am not eligible because I have not completed 5 years in the organization. The company also states that we have not received any government amendments to pay gratuity payment for employees who have completed 4 years and 240 days.

I want to know if I am eligible for it or not. And if I am eligible, how can I claim it if my company denies giving it.

Thank you,
Parashuram

Yes, Parashuram, you are eligible for gratuity. It is clearly mentioned in the definition of continuous service under the Gratuity Act that 240 days is considered as one year of complete service. Hence, you are eligible for gratuity. The court has given a judgment in favor of the employee in such cases. Currently, I do not have that case, but as soon as I get it, I will forward it to you. If the company is denying payment, do one thing: just send your claim form in Form ‘I’ by registered post to the company for claiming your gratuity amount. If you don't receive your gratuity within 15 days, then contact the Assistant Commissioner of Labor office. Even if you don't come under the Workmen definition, he will definitely help you. You will definitely receive your gratuity.

Hi Arunmjadhav,

Thanks for the clarification. Can you please let me know if, for a 5-day working week and 22 days in a month, we should consider 240 days for those organizations? Or should we consider Saturday as a working day?

Please let me know. Thanks for the cooperation.

Thanks & Regards,
Satyaprasad Rayudu

The definition of continuous service is mentioned in 2A of the Gratuity Act. Kindly go through it.

For an establishment working five days a week, 190 days of work in a year constitute one year of continuous service.

As per the new amendment in the Gratuity Act, if an employee has completed 4 years and 240 days in their organization, then the employee is eligible for gratuity.

Eligibility for Gratuity Payment

Sorry, but you are not eligible for gratuity. This topic has been discussed several times in this forum before. Gratuity Law doesn't state anywhere that completing 240 days will be presumed as 1 year. The 240 days are taken into account in the Industrial Dispute Act to be referred to for the completion of 1 year of service.

Yes, there was a case in which the Tamil Nadu High Court has also given the judgment that 240 days will also be taken as 1 year completion of service for claiming gratuity, but that is a state-specific judgment. If you worked in Tamil Nadu, then you can claim it from the employer; however, there is no amendment as such in the Gratuity Act. Please check the link below for the previous discussion on the same topic, also an attachment for the Madras High Court case.

https://www.citehr.com/531816-4-year...-gratuity.html

Regards,
Harpreet Walia

Payment of Gratuity Act and Eligibility

As of now, there has been no amendment to the Payment of Gratuity Act that permits an employee who has completed 4 years and 240 days in the fifth year to be entitled to gratuity. The Act supports the completion of 5 years of service for gratuity. However, in certain High Court rulings, such as the Madras High Court in Mettur Beardsel Ltd Vs Regional Labour Commissioner (1998 LLR 1072) and a recent ruling by the Kerala High Court in Sreeja Vs Regional Labour Commissioner (2015 LLR 826), there has been a different interpretation of the term "continuous service." Accordingly, employees who have worked for 4 years and 240 days in the fifth year are made entitled to gratuity.

Regards,
Madhu.T.K

Mr. Rayadu,

It is 190 days of service for establishments that operate five days a week to qualify for one year of continuous service for gratuity.

Thank you.

Dear Parashuram,

You are fully eligible to claim gratuity for your service of 4 years, 10 months, and 25 days, which is treated as equivalent to 5 years of service. You need not delve into the nitty-gritty of the Payment of Gratuity Act; simply apply formally in the prescribed form and await a response from your employer. If the management does not respond within a reasonable time, send one reminder and wait for approximately two weeks before reporting the case in the prescribed form to the appropriate competent authority as appointed by the Government of your state under the Payment of Gratuity Act. The prescribed competent authority will ensure that your gratuity is paid by your employer.

Regards,

Harpreet, who said there is nothing written about 240 days in Gratuity? Kindly read the Act from the beginning. Under the definition of continuous service, it is clearly mentioned. Please check first and then reply.

Barring the two High Court judgments I have cited in my earlier reply, the term 240 days or 190 days, as the case may be, is referred to in the Payment of Gratuity Act in connection with "continuity of service" or to decide whether there is any "interruption" to the service. If you peruse Lalappa Lingappa and Others Vs Lakshmi Vishnu Textile Mills Ltd (1981 AIR 852), which is considered to be the landmark judgment in this direction given by the Apex Court of India, we will see that the issue of 240 days/190 days or 75% of attendance during a season (in case of seasonal employment) comes into the picture where there is any denial of gratuity to an employee who is otherwise eligible for gratuity but in between the service there has been a year or years in which he has not worked for 240 days due to reasons other than employment injury or maternity leave (in case of a female employee), layoff, legal strike, or other reasons which are considered as not due to the faults of the employee concerned. In the said verdict, it was confirmed that where any regular employee, having worked for five years and thus made qualified for gratuity, has a year in which he had not worked for 240 days against which no disciplinary action was taken, his short working was not considered a break in service; thereafter, he would be eligible for gratuity, presuming that the days he remained absent were regularized.

The Act is still in support of the completion of five years of continuous service to become qualified for gratuity. It is very clearly mentioned in section 4(1) of the Payment of Gratuity Act that gratuity is payable on termination of employment after rendering a service of "NOT LESS THAN" five years. It is true that 240 days in a year (190 days if working below the ground or where the company normally works for 5 days in a week) or 75% of days in a season would qualify for gratuity for that year, but it does not mean that one who has not completed five years but rendered 4 years and 240/190 days in the fifth year would qualify for gratuity.

Even after the verdict of the Madras High Court came, there have been instances of denial of gratuity in similar cases, saying that the High Court verdict is not binding on the other states. I also understand that with the Kerala High Court also delivering the same judgment in Sreeja Vs RJLC, the appropriate authorities under the Payment of Gratuity Act in Kerala will pronounce that 4 years and 240 days would qualify for gratuity. But the same cannot be the case with other states, and they may continue to say that there has been no amendment in the Payment of Gratuity Act, which is still on "not less than five years' service" for gratuity, and the ruling of the Madras High Court or Kerala High Court would not be binding on us. Unless there is a Supreme Court verdict in a similar direction, we cannot accept such a claim.

I also second that a ruling made by a High Court shall be followed by other states.

Regards,
Madhu.T.K