Can a Service Agreement Affect My Gratuity Eligibility After 5 Years of Work? What Should I Do?

Let me introduce myself. My name is Shankar, residing in Chennai, and I am an employee in a reputed BPO concern. I have worked for the past 5 years and one month in that concern. Due to management problems, I was forced to resign from that concern without any notice period. However, I have completed the 5 years and am also eligible for gratuity. When I inquired about my gratuity from that concern, they were saying that we can't give gratuity because you have signed a service agreement. You have yet to complete 2 months.

My doubt is, is there any relation between the service agreement and gratuity? What do I have to do further in claiming my gratuity???

Hi Shanker,

According to my knowledge, as an employee, we have the right to claim gratuity only after the completion of 5 years. If there is any shortfall, regardless of days or months, we can't claim the gratuity.

Regards,
Santhosh Kumar P.

Dear Shankar,

For getting gratuity, completing five years of service is essential. After that, it is your right to receive gratuity. However, you will need to provide evidence that you have served the company for five years. It is possible that for the first two months, they did not include you on their payroll. Nevertheless, if you have documents to substantiate that you were indeed working for them during those two months, you will be eligible for gratuity. Therefore, the decision rests with you. You may have PF slips or salary cheques that can support your claim.

KKT

Dear friend,

As per the Gratuity Act, an employee is eligible to receive gratuity provided they complete 5 years of service on the muster roll, which means on the payroll. In your case, if you have substantial proof that you were on their rolls for five years, then they cannot reject the payment of gratuity. If this is the case, you may insist on the payment of gratuity by serving them a request notice. If you do not receive any reply, then you may serve them a legal notice through a lawyer. Failure to comply may result in legal action being initiated against the organization.

However, ensure that your case is not a terminated one. There is no relation or link to any bond you may have executed stating that you will serve them for a mutually agreed period.

Please do let us know if you meet all the above-mentioned criteria and still do not receive your gratuity payment. We will then suggest the next course of action.

Best wishes,

Sagala Amarnath

Hi,

Section 4 of the Payment of Gratuity Act 1972 deals with the payment of gratuity to an employee who has put in 5 years of continuous service. However, gratuity can be forfeited in the following cases:

(i) If the services of an employee have been terminated for any act, willful omission, or negligence causing any damage or loss to or destruction of property belonging to the employer, it shall be forfeited to the extent of the damage or loss caused.
(ii) If the service of the employee has been terminated for his riotous or disorderly conduct or any other act of violence on his part.
(iii) If the services of an employee have been terminated for any act which constitutes an offense involving moral turpitude in the course of his employment.

So, if you have put in five years of continuous service and do not fall under any of the above categories, you are eligible for gratuity.

Hope this information is useful.

Viswa

Thank you, Mr. Amarnath, for the excellent piece of information. I have submitted my requisition to that concern. They have asked me to wait for replies from the Director. I will let you know once the responses are received.

Thank you once again for your helpful heart.

Shankar