Are Workers in Cooperative Societies Entitled to Gratuity Benefits? Let's Discuss!

Eligibility of Cooperative Society Workers for Gratuity

Whether cooperative society workers (cooperative sector owned and operated by a collective of individuals, i.e., workers) are eligible for gratuity?

Eligibility for Gratuity in Cooperative Societies

Whether workers in cooperative societies (where a group of people collectively owns and runs the business) are eligible for gratuity depends on the rules of the Payment of Gratuity Act, 1972. This law applies to workplaces with ten or more employees. The Act generally covers employees who have worked continuously for five years or more.

If the cooperative society is considered an "establishment" according to the Act and has at least ten employees, the workers might be eligible for gratuity. To get the most accurate and current information, it's advisable to check the latest amendments to the Payment of Gratuity Act or consult with a legal expert familiar with labor laws. Laws can change, so it's crucial to stay informed about the latest regulations.

If the cooperative society has been engaged in an activity that falls under the scope of "industry," whether for profit or not, it will be legally liable to pay gratuity. If the said 'industry' is involved in manufacturing products, plantation, or mining activities, the number of employees is not a governing condition for coverage. It would come under the purview of the Payment of Gratuity Act even if there is only one employee.

At the same time, if the industry is involved in some trading or commercial activity, it would require a minimum of 10 workers for coverage. Only those who have been in continuous service for 5 years would be entitled to receive gratuity.

Eligibility for Benefits in Cooperative Societies

To be eligible for the benefit, by law, employees must have worked continuously for at least 5 years at the cooperative, except in cases of death or disability. In such instances, the benefit will be paid even if the service period is less than 5 years. The benefit will be provided when the employee retires, resigns, or is terminated after meeting the service period requirement.