Gratuity Calculation Confusion: Should My Probation Period Count Towards My 18 Years?

Hello, my name is Jayshri. My joining date was 1st June 2005, and my resignation date is 10th December 2022. The total service period is 17 years, 6 months, and 9 days.

Gratuity Calculation Discrepancy

As per the gratuity act and earlier discussions on this forum, this period should be considered as 18 years for gratuity calculation. However, my company states it's only 17 years, citing that gratuity is applicable from the date of confirmation and not from the joining date (my probation period was 3 months).

1) In my understanding, the probation period should also be considered in the calculation of gratuity. If so, please provide me with the relevant legal documents.

2) My basic salary is 31,444/-. Experts, please advise me on my final gratuity amount.

3) Can a company set its own rules regarding the inclusion or exclusion of the probation period for gratuity calculation, or is it bound by government acts applicable to all organizations?

Thanks with regards,
Jayshri

Section 2A of the Payment of Gratuity Act, 1972 does not make any exceptions for the period of probation when calculating Continuous Service. Even interrupted service is counted, subject to the provisions in the Act. Therefore, there is no question of excluding the probation period. By utilizing the definition of Continuous Service provided in Section 2A of the Act, you can argue along these lines to advocate for the inclusion of the probation period for gratuity.

Hi Jayshri, I hope that the first 3 months of your service were your probation period and that you were not a trainee on a stipend. If that is true, then you are entitled to gratuity for 18 years. The calculation would be 15/30 x 31,444/- x 18 years = Rs. 2,82,996.

In an employment contract, there should be clauses on the period of probation and confirmation of service thereafter. From your post, I assume that you joined your organization in the year 2005 as a permanent employee with a 3-month probation. Therefore, the length of service should be calculated from Day 1 of your entry into the company until the final exit date (date of relieving).

The contention of your company that the probation period should be excluded is absolutely wrong.

Dear Sir, This is Jayshri. Specifically, @KKHR, @Rkn61, and Shri P. Radhakrishnan Nair, I am grateful for your feedback. I showed these inputs, and the company agreed and paid me 18 years of gratuity. Thank you all again. Thanks for this forum also.

Regards, Jayshri