Gratuity Confusion After 4.9 Years: Am I Really Not Eligible?

I have completed 4.9 years in my current organization. Today, I want to resign, and my HR told me that I am not eligible for gratuity as the organization has a tie-up with LIC. Please guide me on this issue.

Dear Patel,

Try to serve 3 months more in the current organization to be eligible for gratuity. 2.5 months of basic salary is important, and if needed, you have to complete the eligibility criteria of 5 years from your date of joining. Otherwise, if you have a good opportunity, seize it and be compensated by a progressive employer in other forms that you may better understand. The above amount should not hinder your progress.

Best of luck.

Thanks

Eligibility for Gratuity Payment

Whenever an employee renders the service of 4 years and 240 days in employment, they are entitled to receive gratuity from their employer, as per the verdict of the Madras High Court in the landmark judgment of the case Mettur Beardsell Vs RLC, Madras, and two others.

In your case, you have rendered continuous service of 4 years and 9 months, which would definitely satisfy the requirement of the said judgment. Therefore, in my view, you are entitled to receive gratuity payment from your employer. Try to make an appeal politely by referring to this judgment for gratuity payment.

In the case of failure, you may consider filing a petition before the Assistant Commissioner of Labour (who is the controlling authority under the Payment of Gratuity Act) of the jurisdiction of your employer to seek a remedy.

Regards,

If you are from Chennai, you are subject to the decision of the Madras High Court, as highlighted by SRIDHARAN in post #3. Consequently, you are entitled to gratuity. Kindly present this decision to your HR department.

A similar ruling exists from the Kerala High Court.

If you are not from Chennai or Kerala, it is my belief that you are not eligible for gratuity. Nevertheless, several knowledgeable members of this forum may disagree with my viewpoint. By reviewing past threads on gratuity, you will come across differing opinions.

It is advisable for you to seek legal counsel.

Thank you.

The response from the HR department is actually misguided. They are not dismissing your claim on the grounds that you have not completed 5 years; they are saying they have an arrangement with LIC. However, it does not matter what arrangement the company has created to fund the gratuity scheme. What is important to note is that they are liable to pay you. The fact that LIC will pay the amount to them is a different story and has nothing to do with your claim to gratuity. The claim to gratuity and its eligibility is defined by the Gratuity Act, and any agreement signed by the company has no effect on a legally binding responsibility.