Gratuity Payable - 5 years continuous service they are eligible or they must work minimum in each completed year?

Dear Experts,

I need a clarification regarding Gratuity payable to employees, If they complete the 5 years continuous service they are eligible or they must work minimum in each completed year..

Kindly advice..

Thanks

Five years of continuous service is necessary to be eligible for gratuity but if the employee has not put in 240 days of service in a year then gratuity is not payable for that year. In other words the employee has to be on the continuous rolls of the company for at least 5 years on end to end basis to be eligible for gratuity and 240 days service is needed to get gratuity for any particular year.

Hi,

Continuous service period of 5 years make you qualify for Gratuity.

In continuation to what KK has said, I would like to add that this 240 days is inclusive of all paid holidays, leave days and weekly off days. In the case of female, the maternity leave, which is paid leave one, shall also be counted as service. Moreover, in some cases, even the days of leave without pay will be counted as continuous service because only such unpaid days against which the employer has not initiated any disciplinary action shall be considered as 'approved leaves' which will qualify for gratuity.

The 'gratuity' contemplated under the Payment of Gratuity Act,1972 is a one-time-statutory payment by the employer of an establishment covered by the Act to his employees irrespective of their status or position of employment on its termination due to attaining the age of superannuation, retirement, resignation or death during service or disablement due to accident or disease. Even the case of dismissal is also treated as termination of employment for the purpose of gratuity if it is not due to certain specific types of proven misconduct.
However, this statutory gratuity has the aspects of eligibility and entitlement on the part of the employee.
Eligibility is grounded on the completion of the minimum continuous service of not less than five years in the same establishment. As per the judicial interpretation of the term "continuous service" as defined u/s 2-A of the Act, this continuous service shall be calculated backwards from the date of termination so as to notionally hold it to be 4 years and 240 days or 4 years and 190 days depending on the type of the establishment concerned. Once the exiting employee fulfills this condition, he is eligible to claim gratuity under the Act. This eligibility clause is not applicable to the case of death.
Entitlement to gratuity pertains to the completion of 240 days or 190 days of service in every year of service. In other words, he is entitled to gratuity only in respect of those years of his service n which he has worked for the minimum no days mentioned above.

Hi all,,

In this connection, a employee completed the 5 years continuous service..In that one year he worked only 150 days...

Is that employee is eligible for gratuity or not..

Please clarify..

Thanks

If in that one year in which he remained absent for such a long period, you had initiated any action against that employee you can deny him gratuity. On the other hand, if you had not taken any action then the absence would be construed as regularised and the gratuity shall be paid.