Am I Entitled to Gratuity for My Entire 11-Year Service, Including Contract Period?

Hi, I joined the company in 2006 on a contract payroll and later shifted to the company's payroll in 2007. In 2017, I resigned, and the company provided gratuity from 2007 to 2017. I would like to clarify whether I am eligible for gratuity for 11 years or 10 years. Your assistance in this matter would be greatly appreciated.

Sir, as mentioned, from April 2006 until March 2007, I was in the same role on a third-party contract. From April 2007 until January 2017, I was on the company payroll.

Dear Mini,

For the period you were on the contract roll, you are not eligible for Gratuity. As you were working under a completely different employer, gratuity is payable if you work for a minimum of 4 years and 240 days under a single employer. Therefore, you are entitled to gratuity since 2007 and not from 2006. Hope this will resolve your query.

Understanding Your Employment Transition

1. What I understand is that for one year, you were on the contractor payroll, and after one year, you shifted to the employer payroll.

Questions About Your Role and Reporting Structure

2. I have the following questions:
a. What was your role there on the contractor payroll? To whom were you reporting?
b. Is your role the same? Are you reporting to the same position/person?
c. Does the contractor's letter say anything about your posting?
d. Is the contractor a company or a firm?
e. If the contractor is a company, does it have any links with the director of the present company?

Next Steps for Clarification

3. After the above information is shared, a proper reply can be given.

Eligibility for Gratuity

In continuation of the email from Mr. Bharat Gera, I have a few suggestions. If the contract service is part and parcel of the present service and is under the same management, and your past services have been transferred to the present service to count for the terminal benefits, and the present management agrees with your past services, then, in all probability, you may claim one year of gratuity.

If the present employer does not consider your past services and issues a fresh service agreement from 2007, then you are bound by that. Therefore, there are a lot of legal implications to consider regarding employer-employee relations.

Hope this information helps clarify your situation.

Yes, you are eligible for gratuity for 11 years as you served with the same organization for 11 years without a break in service. Nowhere is it mentioned in the Gratuity Act that services on a contract basis do not count towards gratuity payment.

You are eligible for gratuity for the period you were on the contract role. Your present employer is liable to pay you as the principal employer.

Thank you for your response.

Eligibility for Gratuity Payment

Management does not agree to pay for that period. When I went through the gratuity act, it seems that if the principal employer is the same, then you are eligible even if you are on a contract basis. I had joined as a D.E.T., but it was also a mistake because my profile was non-technical, and I was working as a data entry operator. Later on, as I have an MBA in HR, I shifted to HR as a single person in the unit, but this was not mentioned in the documents. My joining was in March 2006, and the shift to HR was done in October-November 2006, formalized in April 2007, and from that point, I started on the company payroll.

Approach the Gratuity Authority, which is the labor commissioner of the area. Explain the details to him and file an application for the same. If they fail to help you, approach the conciliation officer, who is also the labor commissioner, and raise an industrial dispute if you fall into the category of workmen under section 2(s) of the Industrial Disputes Act.