Am I Eligible for Gratuity After 4 Years and 190 Days of Work? Seeking Clarification

I have worked in my company from 19th September 2013 to 7th May 2018. It is a 5-day working company.

Query: Am I eligible for Gratuity? What is the rule of 4 years and 190 days? If any, kindly give reference to the document.

Thanks in advance.

Dear ANONYMOUS Friend,

Your employer is not liable to pay you Gratuity under the Payment of Gratuity Act since you have not completed 5 years of continuous service with the employer. There is no such rule of 4 years as you stated.

Hi,

As per my understanding and interpretation of the law, you are very much entitled to gratuity if you have completed continuously 4.5 years in your job. Additionally, each year you must have completed at least 240 working days.

Thanks in anticipation.

Shamsheer Pal Singh Dhillon
Head Legal

Shamsheer Jee,

There is no amendment in the Payment of Gratuity Act to pay gratuity if an employee has not worked continuous service of 5 years. There are case laws where courts have awarded judgments to pay gratuity for working for 4 years and more than 240 days. However, this is not binding on the company; one has to take shelter of the law and fight.

I agree with Shri Keshav Korgaonkar.

Regards,
Suresh

First of all, there is no rule of 4 years and 190/240 days. The Payment of Gratuity Act is very clear on 5 years of continuous service. If you joined duty on 19th Sept. 2013, then you are entitled to gratuity if you resign on or after 19th Sept. 2018. During each of these years, you should have worked a minimum of 190/240 days to qualify for continuous service. As mentioned by another member, individual court cases are not binding and do not mean the law is amended. The requirement of 190/240 days is not applicable to regular salaried employees.

For the calculation of the number of years of service, anything exceeding 6 months shall be rounded off to the next higher number. In this case, the staff has completed more than 4 years and 7 months. In our opinion, he has to be considered for payment of gratuity.

Gratuity Eligibility

Basically, gratuity can be claimed after working for 5 years of continuous service. However, as per a court judgment, the company has to pay gratuity for the following durations:
1. 4 years and 240 working days
2. 4 years and 7 months

Note: Even 4 years and 6 months cannot be rounded up to 5 years. Many companies do not adhere to these norms due to specific judgments in certain cases.

Now, my question is whether gratuity is part of your CTC or not.

Regards,
Dhananjoy Kumar.

Crux of the Act:
Gratuity shall be payable to an employee on the termination of his employment after he has rendered continuous service for not less than five years.

Definition of Continuous Service:
(1) An employee shall be said to be in continuous service for a period if he has been in uninterrupted service, including service which may be interrupted on account of sickness, accident, leave, LOP, layoff, strike, or a lock-out.
(2) Where an employee is not in continuous service within the meaning of clause (1), he shall be deemed to be in continuous service under the employer –
(a) if the employee during twelve calendar months, has actually worked under the employer for not less than
(i) 190 days present, in the case of an employee employed below the ground in a mine or in an establishment which works for less than six days in a week;
(ii) 240 days present, in an establishment which works for six or seven days in a week.
(Maternity leave, Accident, Laid-off period, PL consumed of last year =P)

Which means one should be given gratuity after 4 years 9 months 8 days calendar days including weekly offs
- minus ML and PLs of last year
+ plus CL, SL, LWP, A, PatL, etc.
+ Holidays

For example, 4 yrs x 365 + 9 months x 30.5 + 8 + 4 CL - 10 PL + 8 Holidays = 1745 days
-Sanjay

If someone completed 5.8 years and was terminated, are they eligible for gratuity?