Can an Employee Get Gratuity After Legal Dismissal Despite 20 Years of Service?

Employee Termination and Gratuity Eligibility

An employee was working in the state PSU, and after putting in 3 years of service, he was terminated by the management because he did not have the qualifications required for the post for which he was recruited. The mistake arose due to a clarification by the concerned authority. After 6 months, by an interim order of the Hon'ble HC, he was reinstated. After 5 years, the Hon'ble HC passed its judgment in favor of the management and validated the dismissal order.

This order came to the knowledge of the management after 10 years. The management again issued a letter for termination dating back. An appeal made by the employee before the Hon'ble SC upheld the decision of the HC and directed the management to pay 10 lakh rupees as compensation. Now, the question is whether he is eligible for the payment of gratuity when his dismissal order has been found legal by the court and at the same time he has served more than 20 years in the PSU.

Hi Ranjan,

Yes, he should be liable for the gratuity benefit. It is an employer's mistake to hire an underqualified person for the position. After 20 years of service, they are realizing that the person does not have the required qualifications, which is pathetic.

If an employee is terminated on misconduct grounds, then he is not eligible for the benefit. Otherwise, it is his right to get the gratuity benefit.

Hi Asna,

Let me clarify some facts. The employee was recruited for the position of welfare officer in the factory with a precondition that age relaxation may be granted by the state government, which is the appropriate government under the Act. This fact was known to both parties, and when the age was not relaxed by the government, the management terminated the employee. Please see the decision of the Apex court, according to which the date of termination falls within three years of employment.

Hi Rajan,

As per the court decision, if his date of relieving is within 3 years of service and not (as originally) after 20 years of service, he will be deprived of getting gratuity. This is because gratuity will be calculated based on your tenure on the last working day in the organization.