Is My Startup Legally Required to Pay Gratuity After 5 Years of Service? Seeking Advice

Hi, I have completed five years in a startup company recently. Now I have a new opportunity from an MNC, and I will be shifting this month. When I asked my manager about gratuity, he said we didn't have any provision for gratuity, and we haven't deducted any amount on account of gratuity. Ultimately, they are denying to pay. Seven to eight months earlier, we had a business meeting where HR gave a presentation about new policies and other things. She mentioned gratuity benefits to the eligible employees. I just wanted to confirm if the company has to pay gratuity mandatorily to the employee who has completed 5 years or if it is not mandatory. Please advise.

Thanks, Sachin

Dear,
If any employee has completed 4 years and 240 days continuous services. He/She is eligible to get Gratuity. It is mandatory to pay the gratuity.
Legally employer cannot denied to pay the same.
FYI
Section: 1
Short title, extent, application and commencement.
(1) This Act may be called the Payment of Grataity Act, 1972.
(2) It extends to the whole of India:
Provided that in so far as it relates to plantations or ports, it shall not extend to the State of Jammu and Kashmir.
(3) It shall apply to¬ -
(a) every factory, mine, oilfield, plantation, port and railway company;
(b) every shop or establishment within the meaning of any law for the time being in force in relation to shops and establishments in a State, in which ten or more persons are employed, or were employed, on any day of the preceding twelve months;
(c) such other establishments or class of establishments, in which ten or more employees are employed, or were employed, or, any day of the preceding twelve months, as the Central Government may, by notification, specify in this behalf.
(3A) A shop or establishment to which this Act has become applicable shall continue to be governed by this Act notwithstanding that the number of persons employed therein at any time after it has become so applicable falls below ten.]
(4) It shall come into force on such date as the Central Government may, by notification, appoint.

Dear,
Once employee has completed 4 years 240 days continuous service, legally he is eligible to get gratuity.
for more clarification read the below detail.
Section: 1
Short title, extent, application and commencement.
(1) This Act may be called the Payment of Grataity Act, 1972.
(2) It extends to the whole of India:
Provided that in so far as it relates to plantations or ports, it shall not extend to the State of Jammu and Kashmir.
(3) It shall apply to¬ -
(a) every factory, mine, oilfield, plantation, port and railway company;
(b) every shop or establishment within the meaning of any law for the time being in force in relation to shops and establishments in a State, in which ten or more persons are employed, or were employed, on any day of the preceding twelve months;
(c) such other establishments or class of establishments, in which ten or more employees are employed, or were employed, or, any day of the preceding twelve months, as the Central Government may, by notification, specify in this behalf.
(3A) A shop or establishment to which this Act has become applicable shall continue to be governed by this Act notwithstanding that the number of persons employed therein at any time after it has become so applicable falls below ten.]
(4) It shall come into force on such date as the Central Government may, by notification, appoint.

The company is required to pay you the gratuity provided it employs or had employed 10 persons or more.

Thank you.

Dear, due to some technical issue, my post is incomplete. Anyhow, legally, you are eligible to get gratuity. If any employee has completed 4 years & 240 days of continuous services, legally, he is eligible to get Gratuity. The employer cannot deny to pay the same. Must follow the post of [Login to view]. (The company has employed 10 persons in the preceding 12 months).

Steps to Claim Gratuity

Inform your HR manager that you have checked with your lawyer and have been advised that you are entitled to gratuity. Advise her to consult with the company lawyer and then respond.

You could also complete the gratuity claim forms and send them by registered post to the company to claim your gratuity. In the accompanying note, mention that according to the law, they are required to make the payment within a certain number of days. I am confident that someone will assist you with the correct procedure. If not, you can search the thread for information on gratuity.

Regards

"When I asked my manager about gratuity, he said we didn't have any provision for gratuity, and we haven't deducted any amount on account of gratuity. Ultimately, they are denying to pay.

You are entitled to gratuity. Your manager is ill-informed when he says they have not deducted anything for gratuity. The company is not expected to deduct anything from the employee for gratuity. It is a liability for the company to pay."

You may send the gratuity claim form through registered post. They have to pay your gratuity amount within 30 days as per the rules. It's the employer's responsibility to pay gratuity to eligible employees.

Please provide more details such as Date of Joining (DOJ), Date of Leaving (DOL), and last drawn salary of Basic + Dearness Allowance (DA) for greater clarity.

Regards,
A. Selvaraju

Section 1 of the Payment of Gratuity Act, 1972

Section 1 of the Payment of Gratuity Act, 1972 provides the answer:

1. SHORT TITLE, EXTENT, APPLICATION AND COMMENCEMENT.

(1) This Act may be called the Payment of Gratuity Act, 1972.

(2) It extends to the whole of India: Provided that in so far as it relates to plantations or ports, it shall not extend to the State of Jammu and Kashmir.

(3) It shall apply to:

- (a) every factory, mine, oilfield, plantation, port, and railway company;
- (b) every shop or establishment within the meaning of any law for the time being in force in relation to shops and establishments in a State, in which ten or more persons are employed, or were employed, on any day of the preceding twelve months;
- (c) such other establishments or class of establishments, in which ten or more employees are employed, or were employed, on any day of the preceding twelve months, as the Central Government may, by notification, specify in this behalf.

As per the Payment of Gratuity Act 1972, it becomes a statutory obligation of the employer to pay gratuity to the employee who has completed 5 years of continuous service where 10 or more persons are employed.