Gratuity Confusion: How Is It Calculated If an Employee Misses 5 Months in 5 Years?

I have a bit of confusion in my mind about gratuity calculation. If an employee is absent for 5 months in between his 5 years of service, how will the gratuity be calculated?

Hello there,

Gratuity depends on the employer; so if your company has a policy about leave and amendments, kindly check your policy document. Most companies include the service period, including leaves, in their calculations. Even if your employer is on leave for 5 months and then rejoins, the service is considered continuous. Therefore, calculations will also be done for the leave period.

Thank you.

I would like to request the poster to go through the term "continuous service" defined under section 2-A of the Payment of Gratuity Act, 1972, carefully. Any unauthorized absence that is declared to be a break in service, as per the provisions of the Standing Orders or the Service Regulations of the establishment applicable to the absentee, has to be treated as an interruption and excluded for the purpose of computation of continuous service in that year. Even after the exclusion of such unauthorized absence, if the total number of days comes to 240 days in that year, the employee is entitled to gratuity for that year. If no such declaration is made by the employer, such unauthorized days of absence have to be necessarily taken into account for the purpose of computation of continuous service.