How Can I Approach HR for Gratuity After Nearly 5 Years of Service?

Dear Sir/Madam,

I completed 4 years, 11 months, and 24 days in a public sector company on an outsourced basis. During the first four years, I took only 12 casual leaves and 6 medical leaves. In the fifth year, I also took 6 casual leaves and 5 medical leaves. There are more than 700 people working in this firm, and it operates on a 5-day working week.

How to Approach HR for Gratuity Claim

How should I approach HR to claim gratuity? I have heard about the 4 years 240 days rule. If there is any court order related to this rule, please share it with me and guide me on how to approach our HR team.

Thanks and Regards,
Resmy K V

Dear Resmy,

You are eligible to claim gratuity for the entire service of 5 years as per Section 2-A of the Payment of Gratuity Act, 1972, since you completed 4 years and 11 months of continuous service, which includes the leave of absence you mentioned.

Dear Resmy,

You are eligible for gratuity.

What is Gratuity?

Gratuity is an amount paid by an employer to its employees for rendering their services for equal to or more than 5 years. Usually, 4 years and 240 days are considered equivalent to 5 years of service. In this case, you have served 4 years and 11 months, so you are eligible for gratuity.

Please refer to the attachment for the Gratuity Act.

Best regards

It is better to submit an application in Form I to the employer for claiming gratuity. If the gratuity is denied, then you may approach the controlling authority, i.e., Assistant Labour Commissioner (Central), if you were working in a Central Public Sector Undertaking. If you were working with a State Public Sector Undertaking, then approach the Assistant Labour Commissioner of the concerned state to decide on the issue of gratuity by filing an application in Form N.

As you have mentioned, you have worked on an outsourced basis. If you were employed through a contractor, then you need to apply to your contractor using Form I and not the principal employer. If the contractor fails to pay, then you may approach the controlling authority. You may include both the contractor and the principal employer as parties when submitting the application before the controlling authority.

Payment of Gratuity Act and Continuous Service

As per Section 4(1) of The Payment of Gratuity Act, gratuity shall be payable to an employee on the termination of his employment after he has rendered continuous service for not less than five years.

Interpretation of Continuous Service

Accordingly, the Payment of Gratuity Act supports the completion of 5 years of service to receive gratuity. However, in certain High Court rulings like that of the Madras High Court and Kerala High Court, there has been a different interpretation of the term continuous service. Consequently, employees who have worked for 4 years and 240 days in the fifth year are made entitled to gratuity.