Gratuity Dilemma: Should We Include Gratuity in Final Settlement for a 56-Year-Old Employee?

One of the employees joined our company at the age of 56. He worked for around 1.7 years before reaching the retirement age of 58. Upon resigning, his full and final settlement (FFS) included his CTC gratuity. The question now arises whether the gratuity needs to be paid for his FFS.

Hi, Gratuity will be paid upon completion of 5 years of continuous service. For a 1.7-year service period, gratuity will not be applicable.

Gratuity and CTC

Some employers show the cost of the premium payable to insurance companies in the CTC (Group Gratuity scheme). Having such a component in CTC will not make an employee eligible for gratuity before the completion of 5 years. Anything added within the gross salary to form part of the salary should be paid to the employee.