Can a Daily Wage Worker Claim Gratuity for Early Service Years? Seeking Legal Clarification

Dear sir, please clarify the eligibility of gratuity. Suppose a person joined as a daily wage worker (CL) on 1.1.1985, and then became an employee on 1.1.1987. He retired on 31.1.2018 and claimed his gratuity for the period from 1.1.1987 to 31.1.2018.

Now, he has approached the court to claim gratuity for the period he worked as a daily wage worker, i.e., from 1.1.1985 to 1.1.1987 (2 years).

Kindly clarify whether he is eligible to claim gratuity for the period he worked as a daily wage worker. If so, please specify the relevant section clearly.

Thank you.

Worker is entitled to gratuity from 1/1/85. It is continuous service that matters, not whether he is a daily wager.

Gratuity Eligibility for Daily Wage Workers

The principle is that gratuity is payable to an employee for the continuous service rendered. Whether gratuity is payable for the period of 'daily wages' depends on the definition of continuous service and employee as provided in the Payment of Gratuity Act 1972. The relevant sections are reproduced below:

Continuous Service

2A. Continuous service: For the purposes of this Act, an employee shall be said to be in continuous service for a period if he has, for that period, been in uninterrupted service. This includes service which may be interrupted on account of sickness, accident, leave, absence from duty without leave (not being absence in respect of which an order treating the absence as a break in service has been passed in accordance with the standing orders, rules, or regulations governing the employees of the establishment), lay-off, strike, or a lock-out or cessation of work not due to any fault of the employee, whether such uninterrupted or interrupted service was rendered before or after the commencement of this Act.

Definition of Employee

Section 2(e) "employee" means any person (other than an apprentice) employed on wages in any establishment, factory, mine, oilfield, plantation, port, railway company, or shop, to do any skilled, semi-skilled, or unskilled, manual, supervisory, technical, or clerical work, whether the terms of such employment are express or implied, and whether or not such person is employed in a managerial or administrative capacity. However, it does not include any such person who holds a post under the Central Government or a State Government and is governed by any other Act or by any rules providing for payment of gratuity.

Reading the two together, if the employee has been in continuous service from 01.01.1985 to 31.01.2018 and has been discharging basically skilled, semi-skilled, or unskilled, manual, supervisory, technical, or clerical work, then the employee is entitled to gratuity for the daily wages period too.

Hi,

As the learned member stated, the gratuity is payable since the date of joining the company, regardless of the status/designation, etc. He is eligible for gratuity from 1985. The only condition to be fulfilled was continuous service for 5 or more years, which is not in dispute.

Thanks and Regards

Dear Friend,

Please note that the employee is eligible for the entire period of service from 1.01.1985 (the date he joined as a daily wage earner) until his separation on 31.01.2018.

Thank you.

Before recruiting the person on the company's permanent payroll, if they have been given a break in service for a temporary casual period and then recruited on a permanent basis, they shall not be entitled to gratuity for the casual worker period. However, if there is no break in service and the person is directly hired on a permanent basis, they shall be entitled to gratuity.

M.A. KULKARNI