How Does Working Less Than 240 Days in a Year Affect Gratuity Calculation?

Dear Seniors,

What will be the significance of 240 days while calculating the Gratuity amount? If one employee has worked for 10 years in one organization and during these 10 years of service, in one particular year, he has worked less than 240 days, what will be the effect of this year on calculating the Gratuity? Will there be any effect on the calculation or not? Please guide.

Regards,
Vipul Bhatt

If for any reason an employee who is otherwise eligible for gratuity has not worked for 240 days during any year but for which he was not given any charge sheet nor any disciplinary action was taken for his absence, the year shall be counted as continuous and gratuity paid for that year also.

On the other hand, if the leave without pay was not regularised and is remaining as absent, then that particular year will not be counted for gratuity calculation.

Madhu.T.K

Vipul,

Please provide the full details of the circumstances under which the worker has worked/not worked and the reason why you are asking the question. If you didn't give the full details, you will get incomplete answers or those not correct in your specific case.

As per the Act, if an employee has not worked for 240 days as per Section 2A of the POG Act, he is not in continuous service in that year and is not eligible for gratuity for that year.

I would advise you to recalculate the 240 days in that year. The aspects that need to be considered for the calculation of continuous service as per the act should never be less than 240 days. Even if it amounts to less than 240 days, you can reduce the gratuity for that year.