Gratuity Eligibility - employee completing services of 04 years 09 months 02 weeks and 04 days service

Dear Senior and Colleagues, One of the employees have expected to get relieve from services on 01.09.2021. He is completing services of 04 years 09 months 02 weeks and 04 days service up to the relieving date in the organization. Is he eligible to get gratuity?
Please advise.

The section says that for every completed year of service in excess of six months, the employer shall pay gratuity to an employee. ... So, if an employee completes 4 years and 6 months of continuous service in the same establishment, he is eligible to get gratuity as per the Payment of Gratuity Act 1972.

Dear Malay Gauri consultants Private Limited,

Let me clear you the section related to “rounding off” of Completed Year is applicable after employee completed 05 years continuous uninterrupted services.

On basis of some court verdicts the employee may eligible for Gratuity (completed 04 years and 240 days), but your statement “completes 4 years and 6 months of continuous service” is not right approach to define the criteria.

Moreover, as per POG Act, 1972 the criteria of 04 years and 240 (or as applicable) days is still not regularized by any notification. I have seen many employer reject the Gratuity if employee has not completed continuous (uninterrupted) 05 years service. However, in such cases the employee can claim the Gratuity through putting his case to the Labour Office (or court) and by giving reference of the court verdicts.

The senior members can give more inputs on the matter.

The views of learned member that the interpretation of 4 years and 240 days as equal to 5 years continuous service is endorsed by only a few High Courts, there is no change in law or any Supreme Court Judgement rendering its applicability throughout the country. The Golden Rule of interpretation is the plain and ordinary meaning of the statutory term, which mandates that there has to be at least 5 years of continuous service to be eligible for payment of gratuity. The purposive interpretation given in the few judgements is only helping the claim with 4 years & 240 days of service.

As regards counting of more than 4 years and six month service as being eligible is not accepted in any judgement of High Courts or the Supreme Court. Section 4(2) mentions only that service in excess of six months as being eligible gratuity for that year. So it is only for computation purpose and hence it cannot be stretched to be a part of the definition of 'Continuous Service'

Dear KKHR

Sir, your explanations has been very useful to us. We understand that for the purpose of ascertaining the eligibility of a staff for the payment of gratuity, 5 years of continuous service is any how essential and any partial service (be it 6months or more) need not be construed as one year. Am I correct in my understanding sir.

You are correct to the point that 4 years and six months service won't qualify for gratuity as per PGA 1972. Also pl note that the Madras High Court has held that 4 years and 240 days would entitle the employee to gratuity. Ref. 1998 LLR 1072 MADRAS HIGH COURT ,Hon'ble Mr. S.M. Abdul Wahab J. in W.P. No. 21350f1987 Decided on 12.6.1996 (Mettur Beardse Ltd. (represented by Its Personnel Manager), Madras vs. Regional Labour Commissioner (Central) & Authority under Payment of Gratuity Act). . Madras & Others). Since your tagline indicates Chennai location, this judgement is directly applicable

Dear KKHR,
Thank you for the clarification duly citing the court ruling for the context.
Kindly also clarify me whether the 240 days is calendar days are clear working days.

It us clarified that 240 days is 240 calendar days of continuous service that means inclusive of weekly offs, holidays, leave availed etc.