Understanding Continuous Service: Do 240 Days Include Weekends and Holidays for Gratuity?

Respected seniors, what is the meaning of continuous service of 240 days? Does the 240 days include weekly offs and notified holidays, or are they excluded while calculating for gratuity and ELs?

240 days of service

240 days of service are inclusive of weekly offs, paid leave days, and holidays declared by the company, etc.

In the case before the division bench of AP HC (G. Yadi Reddy v. Brook Bond India Ltd., 1994 LLR 328 (AP) (DB)), it was decided that while calculating the 240-day period, the weekly off and holidays are to be taken into consideration.

Thank you for your prompt reply. Now, my question is: if an employee works for 4 years and 8 months, are they eligible for gratuity, including weekly offs and notified paid holidays?

In general, and as a principle, it is 5 years of continuous service to be eligible for gratuity payment as a right, provided other conditions are fulfilled.

Thanks and regards

Considering having understood continuous services, i.e., the 240-day concept, gratuity becomes eligible on completion of 4 years and 240 days in the fifth year.

Clarification on Continuous Service of 240 Days

240 days include only working days, excluding weekends and notified holidays.

Thank you for your message. I wanted to clarify that the duration of 240 days consists of working days only, with weekends and notified holidays being excluded.

If you require any further information, please feel free to reach out.

Best regards,
[Your Name]

Dear Sumit Kumar Saxena ji, your answer is contrary to my answer given with case law. Is there any subsequent case law contrary, or is there any amendment in the law? I would be thankful if you could shed some light on it.

Dear Akil Ji, as per your reply, if any employee works for 8 months in 5 years, then he is eligible for gratuity, right?

Yes, as per the Payment of Gratuity Act (PGA), continuous service of 5 years renders eligibility for gratuity. It is further clarified that 240 days of service in a period of 12 months entitles one to gratuity for that year. Therefore, when read together, the supposition of 4 years and 8 months of continuous service suffices for eligibility for gratuity. There are supporting judgments from the High Courts of Tamil Nadu and Kerala on this matter.

For an explanation of continuous service, please refer to section 2A of the Payment of Gratuity Act, 1972, where it is detailed.

Continuous Service and Gratuity Calculation

240 days are inclusive of weekly offs and any holidays for regular employees, and 190 days for seasonal workers. (Maternity leave also needs to be included during the calculation.) As per Section 2A of the Payment of Gratuity Act, 1972, an employee is considered to be in continuous service regardless of interruptions due to sickness, absence, LOP, etc. (paraphrased in my own words). Don't get confused.

If an employee takes a sabbatical for more than a year or a long break exceeding a year, all these conditions will be treated as "NON-CONTINUOUS."

Regards,
Piyush