Facing Gratuity Payment Issues After 4 Years and 11 Months of Service – What Can I Do?

Dear All,

Greetings!

I am an HR professional with over 6 years of experience in a Generalist role. I have worked for a manufacturing company in Hyderabad and resigned on April 7th, 2015. This completes my 4 years, 11 months, and 7 days of service.

I have been requesting my employer to release my gratuity payment, but they are refusing to pay, citing that the act stipulates a minimum of 5 years of service or completion of 5 years to be eligible.

Could anyone suggest steps I can take in my case?

Thanks,
M. Bhagya

Hi Bhagya,

You are eligible as you have completed 4 years and 240 days in the 5th year. Maybe they are not aware. You will find the proof on the web, and try to convince them; if not, move legally.

Eligibility for Gratuity After 4 Years and 6 Months

There is a very well-known case; the decision given by the Supreme Court states that you are eligible for gratuity if you have completed half of the 5th year. You can find the decision on the net and show it to your employers.

If that does not work, you need to file an application for gratuity (format given in the act). If they don't pay it within 30 days, you can approach the labor commissioner in the area with a complaint. He will be bound by law to send a notice and ensure that the company pays you gratuity.

As of now, the bare Act states 5 years only and there is no amendment in the act. However, there is only a judgment from the Chennai High Court for 4 years and 240 days.

The period of gratuity calculation is from the day the employee joined the organization until the last working day. Many people think the day the employee joined, and that's incorrect.

Eligibility for Gratuity

You will be eligible for gratuity after completing 4 years and 240 days in the 5th year. Apart from convincing your employer to release the gratuity by whatever means, you can approach the matter legally by the following methods:

1. Send FORM I to the employer within 30 days from the last date of work.
2. If the employer does not respond, file an application under FORM N before the controlling authority under the Payment of Gratuity Act. Ideally, FORM N should be filed within 3 months; otherwise, the delay must be condoned by filing another petition/application to condone such delay.