Is a Retired Government Banker Eligible for Gratuity in a New Private Sector Role?

Dear Sir, One person has worked in a government banking sector until his retirement age of 60 years, where he received Rs. 300,000 for gratuity. Now, after retirement, he joined a public limited company under the Shops & Establishment Act, Haryana, as a fixed-term employee holding the position of DGM-Banking. He worked for more than 5 years with service extensions three times and resigned at the age of 67 years.

There is no standing order passed by any authority. As per our recruiting policy, the normal retirement age is 58 years, and according to the Gratuity trust account opened, the age limit is also 58 years. Could you please confirm if this person is eligible to receive a gratuity amount from our company? If so, how much would that be?

Thanks & Regards,
knjha, HR Dept.

Dear Mr. Jha,

Fixed-Term Contract Employment and Gratuity

Any Fixed-Term Contract of employment is not different from a regular contract of employment in terms of statutory conditions of service, subject to the parameters of limits of salary/wages, length of service, and capacity of employment of the employee concerned as prescribed under the respective Labor and Employment Law applicable to the establishment.

Case Analysis: Gratuity Entitlement for FTC Employee

Coming to the case narrated, when the age limit for retirement fixed under your Organization's Gratuity Trust is 58 years, you have recruited an employee when he was already over and above the age of 58 years on an FTC basis and extended it from time to time so that he was in continuous service for more than 5 years. In short, it is a clear-cut exempted case of appointment from the normal pattern of employment followed in your organization. Therefore, payment of gratuity to such an employee becomes a distinct as well as a special liability of the organization only. As such, payment of gratuity by his previous employer and the age limit prescribed under the Gratuity Trust are issues not germane to the present claim of gratuity of the FTC employee. Hence, the individual is entitled to gratuity under the P.G Act, 1972.