Gratuity Eligibility in Employment Transition: Who's Liable After Contract Renewal?

Gratuity Applicability in Employment Transition

Kindly clarify whether gratuity is applicable under the below scenario.

When an employee was employed by a contractor for a period of 3 years and the contract gets renewed with another contractor who retains the existing employees without a break in service from the commencement of the contract. When the employee is being relieved from his new employment after completing 4 years and 8 months of continuous work at the same place, is he eligible for gratuity payment? Who will be responsible for the liability of the previously completed service? Is it the liability of the principal employer, since the new employer issued an appointment letter from the date of commencement of the new contract?

Eligibility for Gratuity Payment

When an employee is employed by a contractor for a period of 3 years and the contract is renewed with another contractor who retains the existing employees without a break in service from the commencement of the contract, the employee is entitled to payment of gratuity. In this scenario, when the employee is relieved from his new employment after completing 4 years and 8 months of continuous work at the same place of work, he is eligible for gratuity.

Responsibility for Gratuity Liability

The responsibility for the payment of this liability for the previous completion of service lies with the principal employer, as the new employer issued the appointment letter from the date of commencement of the new contract.