Am I Eligible for Gratuity After Working 4 Years, 11 Months, and 17 Days? Seeking Legal Guidance

Dear Expert team, I worked in a private company for 4 years, 11 months, and 17 days. Am I eligible for gratuity? If yes, is there any legal document available from the government as my company is registered in West Bengal and has an office in Pune?

Eligibility for Gratuity Under the PG Act, 1972

Yes, you are eligible for gratuity as per the ratio decidendi of the interpretation of Section 2-A of the Payment of Gratuity Act, 1972, by the Madras High Court in the Mettur Beardsell Ltd case.

If an employee completes 240 days of continuous service in the fifth year of service in the same establishment, they are eligible for gratuity under the Act. This is the ruling of the Madras High Court. There is no contrary judgment by any other High Court on this issue so far. Moreover, as the Payment of Gratuity Act, 1972 is a Central Act, the decision of a particular High Court will hold good across the country in the absence of a contrary decision by any other Court on the same issue.

Dear Sandesh, as our Senior Member Umakanthan Sir has rightly stated, you are eligible for Gratuity Payment. However, it depends on the company's policy. Some companies follow Court Orders, while others adhere to the Payment of Gratuity Act, 1972, as it has not been amended yet.

If you have a good relationship with the company, they may consider your case. You may need to submit an application requesting them to sympathetically consider your case, providing a court order reference.

Suresh

Sorry, Suresh; no employer can substitute their own interpretation with the ratio decidendi of a case law and decide the issue in utter disregard of a High Court's ruling. If one dares to do so, they would be penalized with costs and the burden of interest for the unpaid period by the Controlling Authority under the PGA, 1972, later if a claim is filed by the aggrieved employee.

As the Madras High Court judgment is a result of an interpretative analysis of the existing definition of the term 'continuous service' under section 2-A of the Act, it requires no amendment. Moreover, this judgment is in sync with the interpretation of the similar term under section 25-B of the ID Act, 1947 by the Supreme Court earlier in several cases.

In case of refusal by the employer to pay gratuity, the poster can certainly get it with interest by filing a claim under the Act.

Dear Sandesh, the first question is, why did you leave the service before completing the 5-year term as mandated by law for eligibility for gratuity?

Your employer may not consider you eligible for gratuity because you have not completed five years of service, but rather worked for 4 years, 11 months, and 17 days.

You can approach your employer with the Madras High Court judgment in the Mettur Beardsell Ltd case if you are not considered for gratuity.

Eligibility for Payment of Gratuity

You are eligible for the payment of gratuity. The eligibility conditions require that your employment should be for 4 years and 240 days, which is considered equivalent to 5 years of service.

Thanks & Regards,

Sumit Kumar Saxena

Dear Umakanthan Sir, I just need a simple clarification and interpretation regarding the definition under the act:

Definition of Completed Year of Service

(b) "Completed year of service" means continuous service for one year;

Definition of Continuous Service

(c) "Continuous service" means continuous service as defined in section 2A;

Section 4 of the Payment of Gratuity Act

Section 4 of the Payment of Gratuity Act states: (1) Gratuity shall be payable to an employee on the termination of his employment after he has rendered continuous service for not less than five years.

The interpretation is: Working for not less than five years, and all the completed years of service should be of a continuous nature. If this interpretation is incorrect, please correct me.