Gratuity Eligibility: Is 4 Years and 10 Months Enough for a Claim?

Dear all,

This is a request for information regarding gratuity:

1. If an employee has completed 4 years and 10 months of service, is gratuity applicable in this case?

2. If an employee has completed 4 years and 10 months of service but within those 10 months, their total days of work amount to 180, is gratuity applicable in this scenario?

Thank you.

More than 4 years and 6 months shall be rounded off as 5 years to sanction gratuity.

240 days in a year shall be considered as one completed year of service. It includes earned leave, ESI leave, legal strike/lockout days, maternity leave.

Dear S&R,

Before asking questions, please go through The Payment of Gratuity Act, 1972 and Rules in detail. Minimum 5 years of service is required for claiming gratuity.

4 years 6 months cannot be rounded off to 5 years. A minimum of 4 years 8 months of service is required for Gratuity payment as per the Madras High Court Guidelines, which has now become the norm for the payment of gratuity. Anything over and above 5 years of service is only eligible for rounding off to the next year where the employee completes 6 months of service.

Regards,
Ravichandiran

Recently, we have formed a trust with LIC for Gratuity purposes. As per LIC, unless 5 years are completed by an employee, he/she will not be eligible for gratuity. It is better to stick to the basics of the Gratuity Act for a safer side.

240 days in a year shall be considered as one completed year of service. Therefore, a minimum of 4 years and 240 days of service is required for the completion of 5 years for Gratuity payment. Any service exceeding 5 years is only eligible for rounding off to the next year when the employee completes 6 months of service.

Please refer to Section 2 of the Payment of Gratuity Act, which specifies 4 years and 240 days as the eligibility criteria. If an individual has worked for only 180 days, instead of the required 240 days, it is essential to verify the paid days. If the person has been present for 180 days, with the remaining days being paid leaves, sick leave, casual leave, leave from ESI, or holidays, and the total accumulates to 240 days or more, then he/she is eligible for gratuity.

There have been numerous discussions on this topic in the past. However, delving into further discussions may lead you into a state of dilemma.