Is a Contract-Based PSU Employee in HP Government Eligible for Gratuity at Retirement?

An employee in a PSU of the HP Government is going to retire upon reaching the age of superannuation after serving for 5 years on a contract basis and 3.5 years on a regular basis. Is he eligible for gratuity?

In the first place, an employee of a PSU cannot be considered a government employee just because the PSU is wholly owned by the State or Central Government. Therefore, both the employee and the PSU are governed by the provisions of the PG Act, 1972 only. Whether the previous service rendered by the employee in the same establishment as a contract employee has to be clubbed with the latter service rendered by him on a regular basis or not depends upon the terms and conditions of his appointment. Anyway, in case of denial, he can file a claim before the Controlling Authority under the Act after his formal retirement on attaining the age of superannuation.

Worked on a yearly contract, signing an agreement of service for the period of one year each time. I have signed 10 agreements without a single day of loss, thus working continuously for 10 years. Can I be treated as an "Employee" for Gratuity, and will signing the contract annually deprive me of Gratuity? The HR is denying me Gratuity, stating that since I have signed the contract each year, I am not eligible for Gratuity.

Each year, a new agreement was signed with a change in remuneration/honorarium only, while keeping all the terms and conditions the same. There was no mention of the payment of gratuity in any of the agreements. The agreement can be terminated by giving one month's notice by either party. It also states that "The said contract stands terminated on its expiry unless renewed." I adhered to the attendance, rules, regulations of the company, and the leave policy.

I have approached the employer and the Controlling Authority under the Payment of Gratuity Act, 1972, by filing the application in Form "I" and "N," respectively.

Please advise, sir.

Thanks in advance,

Senthilkumaran
[Phone Number Removed For Privacy-Reasons]

In my opinion, you are eligible for gratuity. You were an employee under a fixed-term contract arrangement. You may refer to Goodyear India Limited vs. K.G. Devessar, (1985 4 SCC 45), and also please go through the attachment which pertains to a PSU.

I also agree with Mr. Madhu. You are eligible for gratuity. My previous organization also employed people under FTC, which is renewed every year, and they were all eligible for gratuity. I was working with an MNC registered under S&E.