Is She Eligible for Gratuity After 5 Years and 11 Months of Service? Let's Discuss!

Employee completed 5 years and 11 months in an organization. She was initially working as an employee and not on the payroll of the organization. She has been on the payroll since 2013. She has submitted her resignation and wants to know if she is eligible for gratuity, as she has been continuously working in the same organization. All her documents, including her experience letter, offer letter, and performance appraisals, have 2010 as her date of joining year. If the management is not obligated to pay gratuity, can she pursue this matter further?

This is with regard to your above post. I understood the case, but the information furnished by you is not in proper line. However, for statutory benefits such as PF, ESI, Bonus, and Gratuity, the eligibility date should be considered as per the date of the appointment letter.

Gratuity Eligibility

As per the provision under the Payment of Gratuity Act, an employee will be eligible for Gratuity after completing 5 years of service or 4 years of service and completing 240 days in the 5th year, under the light of the Madras High Court Order.

If your friend's total years of service as per the appointment letter is 5 years or 4 years and 240 days, then YES, she will be eligible for Gratuity; otherwise, NO.

Thanks,
Ubaid Raheman.

Her employment letter, experience, and her salary slip have her Date of Joining (DOJ) as 31/07/2010. In that case, is she eligible for gratuity?

Yes, she is eligible for gratuity.

For your kind information, if any employee joins any organization, how can you consider them as an off-role employee? It is an unfair practice. From the day 1 of joining, he/she is eligible for all the benefits of the organization.

I do agree with you, "From day one, an employee will be eligible for all statutory benefits." However, I am still confused, as Sandhya mentioned she was on the payroll from 2013. How did the company issue her Letter of Appointment and other relevant documents from 2010?

Here, I presume that prior to 2013, she may have worked as a Consultant/Retainer or on a Contract basis. If I am correct, then she will not be eligible for gratuity. @Sandhya_ please confirm her nature of employment from 2010 to 2013.

Thanks,
Ubaid Raheman.

Dear Sandhya,

I agree with Mr. Reheman. You say that she was on the payroll from 2013, which means she is yet to complete 5 years and hence is not eligible for Gratuity. However, you say she has received an appointment letter which is effective from 2010. So, what was this appointment letter for if she was not on the payroll? This is confusing, so please clarify her nature of employment from 2010 to 2013, which will help the group guide you better.

Regards,
Vineeta

Appointment Letter Details

A letter of appointment should contain full and clear details regarding remuneration and welfare aspects such as PF, insurance, transport, and gratuity. It should also specify when the appointee will become eligible for benefits. An employee joining a new organization should be entitled to the regular benefits of their cadre from the date of appointment. This information is typically communicated to employees through the appointment letter, and the new employee should be in a similar situation.

The initial response is based on the limited information provided, but a more comprehensive reply can be given after reviewing the appointment letter.

Regards,
RDS Yadav
Labour Law Advisor