Gratuity After Superannuation: Does Contractual or Consultant Work Count?

Good morning. After superannuation, if an employee continues as a contractual employee or a consultant, will the later period of service be considered for gratuity?

Gratuity for Superannuated Employees

It depends.

A) If the continuation of employment of the superannuated employee is on the basis of a fresh contract of service, the liability to pay gratuity for that service extends. In other words, if the employee is continued without retirement on the date of superannuation, they should be paid gratuity later, including the extended period of service. If the fresh tenure is after the settlement of the gratuity pertaining to the original spell, gratuity should be payable later subject to the parameter for minimum qualifying service.

B) If the service post formal superannuation is based on a "contract for service," no gratuity shall be payable irrespective of its duration.

Retired Employees as Contractual Workers

Yes, this is a very interesting query. In recent times, retired employees have often been taken on as contractual employees.

The first thing to note is that retired employees are usually above 60 years old, so the applicability of labor laws is nullified. Payment of gratuity is as desired by management. The definition of gratuity implies showing gratitude towards an employee for their valuable services to the company, so it is left to be decided by the company itself.

Regarding timings and safety measures, they are the same as those for general regular employees.

Thank you.