Gratuity Eligibility Question: Does a 6-Month Absence Affect Entitlement After 5 Years?

Dear all,

An employee left service after completing 5 years. During his 3rd year of service, he was absent from work for 6 consecutive months due to personal reasons and was not paid a salary for this period. In that case, is the employee eligible for gratuity?

Kindly clear my doubt.

Hi, Whether that 6-month break in service is an approved one or an unauthorized absence? There is a provision called sabbatical leave.

As per Section 2A of the Gratuity Act, in the event the employee is absent from duty due to sickness, accident, leave, or absence from duty without leave, he/she would be entitled to the benefit of gratuity unless the employer has passed an order treating such absence without leave as a break in service in accordance with the Standing Orders of Employment applicable to the employee.

On what grounds is the employee on leave for 6 months? Has this been approved by his/her manager? If yes, then it shall be treated as continuous service and applicable for the payment of the gratuity amount.

If a six-month leave period of an employee, due to medical or any other reason, is sanctioned and approved by the employer, then the period of absence from duty by them, even if on loss of pay, can be treated as "in service." However, if the absence from duty is unauthorized, then we can interpret it as a break in service.

Continuous Service and Gratuity Eligibility

As per SEC-2A of the PG Act - Continuous Service definition, if the employer has not passed any order or issued any letter to the concerned employee stating that the entire period of leave of absence will be considered as unauthorized absence, then it will be considered as continuous service, and the employee will be eligible for Gratuity.

Regards, S K Bandyopadhyay

CEO-USD HR Solutions

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