Am I Eligible for Gratuity? Understanding Leave and Tenure Calculations

Working in a software company since 23/09/2013. What should be my last working day if I want to be eligible for Gratuity? Working for 5 days a week, full time. I was on maternity leave from August 2017 to February 2018. Should these leaves be subtracted from tenure? If it is 4 years + 240 days, what are those 240 days? Working or including week off like Saturday and Sunday?

Eligibility for Gratuity

Maternity leave days, which are paid leave days, will be considered as working days for the purpose of calculating gratuity. However, to be eligible for gratuity, you should have at least 5 years of service. There are a few High Court judgments supporting the notion that an employee who has not completed 5 years of service but has worked for 240 days in the fifth year is eligible for gratuity. Nevertheless, this cannot be assumed as a right unless the Gratuity Act is amended in accordance with these judgments. Additionally, the 240 or 190 days (for establishments working for 190 days) rule applies to daily-rated workers and not to employees like you. If your employer refuses to pay gratuity, the only recourse available is to file a case against the employer.

Advice on Gratuity Calculation

Never calculate gratuity in advance and then submit the paperwork. If you are unwilling to work with an employer who has provided you with employment for 4 years plus 6 months of maternity leave (which is your right), it is advisable to resign immediately. Disregard the provisions of the Gratuity Act.

They have provided employment plus maternity leave, and I agree. However, I have worked more than necessary. It's not because I am not interested in working with them; I am planning to quit because of other commitments. I do not want to overlook the scope of Gratuity and quit. I think it's my right and would like to avail it. Please do not provide advice like quitting immediately if you are not interested and all that.

"Please do not provide such advice like quitting immediately if you are not interested and all that."

When you post a query in a public forum meant for advice, you will receive different types of advice. Accept the advice you like and leave the rest.

Hi @suresh2511,

I wanted to know how many months I should work precisely. It's not exactly 5 years, but less, therefore, not necessarily should I work until the date you have shared. I know my rights, of course, but not the exact tenure! That's why I have raised in the 'forum' hoping somebody with some knowledge about this would reply.

As per the provisions of the Payment of Gratuity Act, 1972, you are required to work a minimum period of 5 years to be eligible for gratuity. Thereafter, every 6 months and above will be considered as 1 whole year.

You have already availed maternity leave for 7 months (Aug. 17 to Feb. 18); therefore, do not take any risk of any shortfall. It is advisable to get yourself relieved only after 23.09.2018 to receive the gratuity amount.

There have been cases where courts have awarded judgments for the payment of gratuity to individuals who worked for 4 years and 240 days, but this is based on merit. There has been no amendment in the Payment of Gratuity Act to pay gratuity to those who have worked for 4 years and 240 days. Your company will likely refuse to pay you gratuity if you are released on or before 22.09.2018.

If your attendance record is satisfactory (without LOP), then you can leave only after 23rd July 2018 and subsequently pursue gratuity through the court.

Regards, Suresh