Gratuity Calculation for deceased employee in shorter Period.

Hi Seniors and fellow HR's,

I have been struggling to calculate Gratuity working for a deceased employee who has worked for only days from his date of Joining. Should I calculate for all the working days as tenure or need to go for percentage of tenure for an year(09/365). Please give me guidance. Awaiting for the reply seniors.

DOJ of Employee is Say 01.03.2023 and Deceased date is 10.03.2023.

An employee worked for one day more than six months shall be considered worked for one (additional) year for calculation purpose. Similarly, the number of days less than six months shall be completed omitted. But in the case of death, no such qualifying periods shall apply. This is the law. That means, if the service is less than one year, or even less than six months, it is advisable that it be taken as one year service without any reference to the qualifying periods and pay 15 days salary as gratuity.

I would invite Umakanthan Sir to further clarify this matter. Please Sir...

I fully agree with the observation of Mr.Madhu.

Since the Payment of Gratuity Act,1972 is a social security legislation, the first proviso to sub section (1) of section 4 provides for a statutory relaxation from the minimum qualifying service prescribed in the main part of section 4(1) in respect of termination of employment arising out of death or disablement due to accident or disease.

If the method of calculation prescribed u/s 4(2) is strictly applied in such a case of death or disablement while in service that falls below 240 days which has to be calculated backwards effective from the date of termination, no gratuity can be paid as the actual service rendered simply escapes the deeming provision enunciated u/s 2-A which defines the term 'continuous service' for the purpose of the Act.

Thus, a conjunctive reading of the minimum qualifying service mentioned u/s 4(1) and the definition of the same u/s 2-A of the PG Act,1972 would bring out the legal position that the calculation mentioned u/s 4(2) cannot be independent of the deeming provision of section 2-A and the relaxation of the first proviso to section 4(1) of the Act.

Therefore, I also would suggest the poster to act as per the advice of our friend Madhu.

What Are the Conditions for Claiming Gratuity?
An individual is eligible to claim gratuity if he/she meets all these three conditions:

He/She must have served in the same capacity in the last two years immediately preceding the date of death;
It must be within six months after the end of the financial year in which the death occurs;
He/She must not have retired before the date of death.

Members to offer views on applicability --2 years min

There cannot be any such service condition/ requirement of the company attached to any legal provision. If the Act governing payment of Gratuity says that it is payable without considering the qualifying service of five years in case of death of the employee, it should be paid. You cannot make your own laws attached to a legislative provision,

https://vakilsearch.com/blog/gratuit...h-of-employee/

Interesting....!!!

"In India, it is defined as ‘compensation payable on account of death’...." Is it?

"It is taxable...!"

"The amount of gratuity which can be deducted from gross salary is limited to ₹10,000 per month..."

I think the author is referring to something else and not the one as per Payment of Gratuity Act 1972, the one applicable to private establishments and also to public sector companies. There can be some settlement wherein the way in which gratuity is arrived at, like as against 15 days salary for every completed year of service, it can be 30 days salary etc but the principles of payment remains the same. The one available in the link is not with reference to our situation.

I think what the colonel refers to is death-cum-retirement gratuity applicable to Government employees. Gratuity for industrial employees throughout India is governed by the Payment of Gratuity Act,1972 or the service regulations if they have better terms.

I had posted extract --
Would seek comments .
Not on what is wrong but on Gratuity applicability in case of death

Dear Col. Suresh Rathi, what we have commented are based on law and as our Senior Member, Umakanthan Sir has said what you have referred to is government norms for gratuity and you can follow it provided your case is related to government service and if you want the comments about gratuity payable in case of death of private sector employee, you may please refer to the comments # 2 and #3 above.