Gratuity Denied After 4 Years of Service: Is My Company Right About the Supreme Court Ruling?

Hi, good evening. Recently, I resigned from my job after working for 4 years, 8 months, and 25 days. However, my company is not providing me with gratuity. They claim that the gratuity act has not been approved by the Supreme Court. Can you provide me with information on this Supreme Court judgment?

Hi, if the service is more than 6 months in a year, then such year is considered as a year for calculation. If the service is less than 6 months, then you have to ignore that year for calculation.

For example:
- 4 years 6 months = 5 years
- 4 years 5 months = 4 years

Based on this, you will be eligible for gratuity.

Hi, In one of my previous organizations, I completed a tenure of 4 years, 11 months, and 1 week before joining another organization. While I cited examples of other organizations that give gratuity on completion of 4 years and 7 months, the respective HR said that this is not a ruling but depends on the individual organization's discretion if they want to give gratuity before completion of a total of 5 years. Please guide if I need to follow up on that?

Rounding Off and Gratuity Eligibility

Please note that the concept of rounding off applies only after completing 5 years of continuous service. It is not applicable for 1-5 years. For 1-5 years, you must complete 240 (or 190 in some cases) days each year for the year to be considered as a completed continuous year. Similarly, after completing five years of service, you will be eligible for Gratuity. However, for the 6th year and onwards, the concept of rounding off by 6 months is applicable.

Gratuity Payment Before 5 Years

As per the Act, the 240-day formula for the 5th year is still not approved through notification. However, there have been certain court verdicts that have accepted the period for Gratuity payment. Ultimately, it is the organization's decision whether to pay Gratuity before completing 5 years of continuous service. If you have completed 4 years and 240 days of service, then you can claim the Gratuity through a court case. If the court allows it, the employer will be obliged to pay the Gratuity. You can refer to previous court verdicts for support.

However, it is a fact that this concept has not yet been regularized through a gazette notification, so we cannot say it is applicable as per the Act. I hope I have clarified your points. This matter has been thoroughly discussed many times in the forum, and you can find expert comments there. Seniors can shed more light on the matter.

Thank you.