Gratuity Concerns: Does a Contract-to-Payroll Transition Affect My Eligibility?

Hi, I have a doubt regarding claiming Gratuity. I have worked for a company since 07 July 2014 and ended my tenure on 03 March 2020, which very well makes for a 5-year tenure. However, the first year in the company, I had worked under a contract and continued on the payroll without any gap. My employee ID was changed after the contract period, and HR also opened a different PF account for me rather than continuing the same.

Will this scenario affect my Gratuity Application? Please advise.

Though you have served in the same company, your employment status changed once you became a permanent employee of the company. You mentioned that in the first year, you were on a contract with the company. When did your contract end? When did you receive your appointment, and when did you join the company as a permanent employee?

You have worked on a contract for one year and four years on the roll. Since a new employee number and PF number were assigned to you after one year, legally speaking, you are not entitled to gratuity until you complete another year. However, the employer, at their discretion, as a gesture of your 5-year work period, may consider that one year also for the purpose of gratuity calculation. It is not clear whether you are still continuing or have left the services of the company. If not resigned at the time of resignation, please make a request to consider that initial one-year period as well for gratuity calculation.

Above all, please check whether your employer comes under the purview of the Gratuity Act as criteria stipulated by the Gratuity Act.

Regards, V.M. Lakshminarayanan

I was on contract from 07-07-2014 to 06-06-2015. Since 07-06-2015 was a Sunday, my appointment letter is dated 08-06-2015. Even when I was under contract, I was paid directly from the company's payroll, and no contractor has paid me.

Clarification on Contractual Employment and Gratuity

Do you mean to say there is involvement of another separate contractor, but you worked in the same company under a separate short-term contract, say one year? If it was for more than one year, doesn't it mean the old contract was closed or terminated after one year? Was there any increase in emoluments compared to the old contract period?

Details of Contractual Agreement

Did the contract job involve any appointment letter or an agreement? Who signed that appointment letter or contract?

Current Employment Status

Are you currently continuing in the job, or have you left now? Please describe the full details so that we can advise properly.

If you have worked under the same principal employer for 5 years, you are eligible for the payment of gratuity. You need to submit your claim to your employer. Having 2 employee IDs and 2 PF member IDs will not disentitle you from gratuity. You have to mention your original date of joining (on contract).