Am I Eligible for Gratuity After Taking Maternity Leave in My Fifth Year?

I have worked for 5 years and 13 days with a company. In my fifth year, I was on maternity leave for 6 months. I asked my company for an extension for another 6 months where they can put me on LWP. They denied. So I chose to resign as I could not arrange any help for my newborn.

Am I eligible for gratuity?

You should have provided your Date of Joining and Date of Leaving for answering your query. Based on your statement that your service is more than 5 years, you are eligible for Gratuity. You have to submit your claim for Gratuity.

Maternity leave is paid; hence, you are considered to be in service during that period. If you have completed more than 5 years of service, including maternity leave, and if your company employs more than 10 employees, then you are entitled to receive gratuity.

The position is clarified in the Payment of Gratuity Act 1972. As per Section 2A(2) defining 'continuous service' for the Act, the relevant portion reads as follows:

(iv) in the case of a female, she has been on maternity leave; however, the total period of such maternity leave does not exceed twelve weeks.

So, the provision as it stands is for computing only 12 weeks, even though the Maternity Benefit Act provides for 26 weeks of maternity leave. In your case, it needs to be calculated whether you are completing 240 days of service in the 5th year of your service with 12 weeks of maternity leave and 14 weeks of paid leave, as leave of all kinds is to be reckoned. As far as I could verify, Sub-section IV has not been amended to make it 26 weeks.

KK!HR

My DOB is 21 Aug 2012. I took Maternity Leave on 18 Feb 2017 until 18 Aug 2017. After that, I took 13 days of Paid Leave and worked one day at the office. I resigned on 3rd Sept 2017. Am I eligible for gratuity?

Yes, you have completed the minimum eligibility period of five years of 'Continuous Service' under the Payment of Gratuity Act 1972 and are eligible for the payment of gratuity. KK! HR

But my employer is denying gratuity, saying that any paid leave does not count for the calculation of gratuity. Does any company have the right to do so? Where can I find the policy which states this, as I need to produce it in my support.

Dear Pammi,

Have you submitted your Gratuity Claim in writing to your employer consequent to relieving from the service of the company? Is the employer denying gratuity orally or in writing?

If your employer rejects your Gratuity Claim, approach the jurisdictional Assistant Labour Commissioner/Controlling Authority with all relevant details and documents. Have you provided the details of your Date of Joining and Date of Leaving as per company records?

Kindly ensure to follow the necessary procedures to claim your entitled gratuity benefits.

Best regards

Dear Srinath,

My Date of Joining was 21 Aug 2012, and I took Maternity Leave on 18 Feb 2017 till 18 Aug 2017. After that, I took 13 days of Paid Leave and worked one day in the office before resigning on 3rd Sept 2017.

During the maternity leave period of 26 weeks, will I get any earned leave or privileged leave?

Consequently, your Total Service: From 21/08/2012 to 03/09/2017 - 5 Years & 14 Days. Have you served the notice period as per the Terms of Appointment mutually agreed & accepted? Has the company waived the notice period? Is your resignation accepted by Management in writing? Have you received the Relieving Letter?

After completing the relieving formalities, submit your Gratuity claim in writing by Registered Post Acknowledgement due and wait for further action by management.

Dear Srinath, My date of joining is 21st Aug 2012, and my date of resignation is the 3rd of September 2017. I took maternity leave on the 18th of Feb 2017 until the 18th of Aug 2017. Then I took PL until the 1st of September. I rejoined my office on the 2nd of September. My baby, then 5 months old, didn't eat or drink for 8 hours in my absence. I felt horrible and decided to quit. So I sent my resignation on the 3rd of September, which was immediately accepted. The next day, I received a notice on the company letterhead from HR stating that I needed to pay 2 months of salary in lieu of the unserved notice period. I asked them to process the F&F and settle the due from my gratuity. They replied to me via email stating that I was ineligible for the same as my number of working days was less (not 240) after excluding the paid leaves.

Hi Srinath,

Answering your other questions. No, I didn't serve the notice period of two months, nor was my waiver request accepted. Yes, my resignation was accepted via email. However, I have not yet received my relieving letter as the initial step taken was to recover the two months' payable notice period. One month is mandatory, and the other is payable or can be waived at their discretion. I have not submitted the gratuity request as of now.

Maternity Leave and Gratuity Eligibility

Ms. Pammi: During maternity leave, you need not take PL/EL as Maternity Leave itself is paid leave. If you are seeking leave after the maternity leave is exhausted, sanctioning further leave depends on the exigencies of service. While Maternity Leave is a legal right bestowed on a woman employee, PL/EL is always subject to sanction and depends on exigencies of service.

Your employer is not correct in stating that paid leave is not counted for gratuity purposes. As per the Payment of Gratuity Act 1972, one is entitled to gratuity after completion of five years of continuous service. The term "Continuous service" is defined in Section 2A of the Act. It reads as follows:

Continuous Service

For the purposes of this Act, an employee shall be said to be in continuous service for a period if he has, for that period, been in uninterrupted service, including service which may be interrupted on account of sickness, accident, leave, absence from duty without leave...

So, since your service has been uninterrupted from 21st August 2012 to 3rd September 2017, you are fulfilling the minimum eligibility period and are entitled to gratuity. The Act requires that the gratuity is paid within 30 days of your termination of service; beyond that, you are entitled to interest as well. As it is more than a month, they will have to pay you with interest.

You can try to reason out with the above legal position, but if they persist with their wrong interpretation, you can adopt the way suggested by Sainath Sir.

Practical Perspective on Maternity Leave and Gratuity

Ms. Pammi,

My view is more from a practical perspective than a legal one.

It seems you did not share the plan with your employer and had an intent that is obviously to cross the borderline intentionally. What I can observe after reading all comments together here is the 12-week initial term of maternity leave was increased to 26 weeks, but there is no reference in gratuity until that time. It is hard to give you pragmatic suggestions in this case. It might be interpreted that 18th Feb was your last working day and 2nd Sep is merely to inform them that you are joining. Before 18th Feb, I am not too sure whether there have been absences marked (at least I cannot see in your comment), then it becomes a bit tricky. It also seems that you are in breach of the contract by not serving the mandatory notice period of one month and even the second month is on their consent.

It also seems that since you have not given a fair opportunity to your employer to plan, this situation has resulted, otherwise nowadays almost no employer takes an aggressive approach in such matters. The intention of the employer seems not too bad by extending, of course, 3 months into 6 months (though it is rights but was sudden which hampers the work of the employer) and then extending by giving PL that could only be with the hope to get you back.

Try to have mutual understanding with the employer before moving to legal action because the reason is that it doesn't work so efficiently here in India. I am again saying this is more of my thought than legal just because I am not a legal guy. Good Luck.

Dear KK!HR,

Sir, I refer to your post #4 above in which you have stated as follows:

As per Section 2A (2) defining 'continuous service' for the Act, the relevant portion reads as follows: "(iv) in the case of a female, she has been on maternity leave; so, however, that the total period of such maternity leave does not exceed twelve weeks." So the provision as it stands is for computing only 12 weeks even though the Maternity Benefit Act provides for 26 weeks of maternity leave.

May I request you to kindly post this section verbatim with highlighting the words "maternity leave" and/or 12 weeks. This request is made so that we can learn from interactions and correct ourselves when we are wrong.