Am I Eligible for Gratuity After 4 Years and 241 Days? Seeking Legal References

Hello all,

I joined my organization on 21/07/2014, and my last working day is 19/03/2019 (I had no breaks in my service). The organization follows a 5-day/week model. So, the total tenure would be 4 years and 241 days.

Could you please tell me whether I would be eligible for a Gratuity payout? If yes, could you also refer me to a legal document (Government Labor laws/court order) where it is mentioned?

One needs to complete a minimum continuous service of 5 years to be eligible for gratuity, unless the company's policy or standing orders mention a continuous service of 4 years and 240 days to be eligible for gratuity. I suggest you thoroughly check your appointment letter, company policy, or standing orders if there is a mention of tenure eligibility for gratuity. If not, you can refer to the case of Mettur Beardsell, wherein the Madras High Court passed a judgment that an employee having worked for more than 240 days in the fifth year will be eligible for gratuity.

Regards, Rahul

Since your establishment adopts a 5-day work week, according to the ratio decidendi of the judgment cited above, if you have worked for 190 days during the fifth year of service, it would be treated as continuous service under Section 2-A(2)(a)(i) of the Payment of Gratuity Act, 1972. Therefore, in any case, you are eligible for gratuity under the Act.

For sure, there is a lot of debate on Gratuity eligibility. Section 4 of PoG act clearly mentions eligibility to be 5 years of continuous service. Though the citations favoring 4 years and 240 days belong to the respective High Court of TN and Kerala; and can't find any Apex court judgment on the same. Hence, this may apply to the state of TN and Kerala; however not sure about the other states till there is an apex court decision.

Regards,
Rahul

Since you are the aggrieved party, you may request the employer to provide you with the gratuity for the service rendered. Wait for their response before taking the next step. Check if they are citing any law or policy to the contrary before taking any legal action at this stage. You may also challenge the company if they refuse to pay you and inform them that you may have to go to the Labour Commission to get your dues. Your lawyer can assist in filing the papers with the relevant case laws. The completion of the fifth year is an issue concerning eligibility for the payment, although the 240-day criteria have been incorporated and cited in judgments.

There is nothing to lose; go ahead and start with a request or two before embarking on the legal process.

Thanks and regards

If during the fifth year your number of working days becomes 240 days or more, one becomes eligible for gratuity as per new amendments.