Gratuity Denied After Nearly 5 Years of Service: Where Can I File a Complaint?

Hello everyone. I am Umesh Sharma and worked as an Assistant Professor in a private engineering college on a regular basis for 4 years and 276 days (from 3-8-2012 to 5-5-2017). At the time of resignation, the HR staff told me that I was not entitled to gratuity as I had not completed 5 years. However, recently, I discovered that 4 years and more than 240 days are sufficient for entitlement to gratuity in India. I then submitted a gratuity application in December 2018 but have not received any response yet. If they don't respond to my application, where should I lodge a complaint regarding this matter?

To file a case with the Labour Court for the purpose of gratuity, the appropriate authority will decide whether the criteria for gratuity payment should be based on 240 days or 5 years of service.

Dear Anony,

It is mandatory to serve a period of 5 years of continuous service to be eligible for Gratuity. In your case, you are not eligible for gratuity as you did not serve for 5 years.

Regards,
Rahul

Section 4 of the Payment of Gratuity Act mandates the completion of 5 years of continuous service to be eligible for gratuity.

Regarding 4 years and 240 days: unless you are in the state of TN or your company policy/appointment letter states the completion of 4 years and 240 days for gratuity eligibility, you are not eligible for gratuity before completion of 5 years of continuous service.

Regards, Rahul

What learned member Rahul has mentioned above is correct. Notwithstanding, file a complaint with the Labour Commissioner of the area with full details and see whether the Commissioner is ready to take up the matter.

5 years of service is a must, and in the last year, 240 days of service are mandatory for being given gratuity. There was a verdict in TN about gratuity, but automatically other states are not bound by the verdict.

Though in principle the law requires an employee to have 5 years of continuous service to be eligible for gratuity, you have nothing to lose if you proceed to file your claim and also cite the judgment of the Madras High Court to emphasize your argument. After all, you have nothing to lose but may stand to gain if the Court accepts the argument and you receive the money. There is nothing to stop you from filing the claim and moving forward.

Advice is for those who are on the verge of resigning but are in a dilemma regarding the receipt of gratuity. They can wait until completion of 5 years of service and rest assured. The judgment of the honorable court makes sense in the calculation of the fifth-year issue. Ultimately, anything that benefits employees is always welcomed by all the courts, so why not here.

Thanks and Regards

Indeed, there is nothing to lose but time and effort if you decide to make a representation against non-payment of gratuity and cite the Madras High Court judgment. It is suggested that you fill out "Form I" as per the Payment of Gratuity Act and send it to your previous employer. If they refuse to pay or reject your claim within 15 days from the day they receive the claim, you can file a formal complaint with the local labor inspector and take it up. The inspector will be the first government official to guide you on whether your claim is admissible under the law or not.

Regards, Rahul

As per my knowledge, the Gratuity Act states that 5 years of continuous service are required to claim gratuity, but also mentions that 4.6 years of service are also eligible. Therefore, I believe you are eligible to make a claim. Gratuity amount is an insurance benefit, and the employer simply needs to submit the claim form. It is possible that your employer did not pay the contribution amount to the insurance company. I recommend consulting a labor laws advocate for legal advice and potential appeal.

Seniors, please let me know if I am mistaken.

Hi,

Though 5 years of service is mandatory as per law, 4 years and 276 days are no less than 5 years to make you eligible in my view. Mention the Madras High Court decision while filing the case with the local labor office and let them use their discretion. Now, when the government was heard planning to reduce the eligibility to 3 years, I hope you will win as your demand is not unreasonable.

Regards,
Puran