Contractual Employees and Gratuity: Does a 5-Year Contract Count as Continuous Employment?

My question: Are contractual employees (fixed tenure followed by renewal) eligible for gratuity payment at the end of 5 years? Will contracts be considered as continuous employment?

Eligibility for Gratuity Under the Payment of Gratuity Act, 1972

The nature or type of employment, whether permanent, temporary, or contractual (e.g., FTC, etc.), is not relevant for determining the eligibility of an employee for gratuity under the Payment of Gratuity Act, 1972. Any Fixed Term Contract of Employment, if renewed consecutively and the employee renders continuous service of not less than 5 years under the same employer, makes the employee eligible for gratuity under the Act. Every time the contract is renewed, each expiration is automatically extinguished.

Regards, PIYADEBOSE

Dear Team, Please check and confirm the eligibility of gratuity for contract employees, specifically whether it will be paid by the principal employer or the contractor. Are there any provisions that make the principal employer liable to pay gratuity to contract employees?