Hi,
Applicability of the Gratuity Act
The Gratuity Act is applicable to factories, mines, oil fields, plantations, ports, railways, motor transport undertakings, companies, and to shops and other establishments employing 10 or more workmen. You mention that there were only 2 employees. Is this from the beginning or are you referring to the current strength? Please note that organizations with a workforce of 10 employees on a single day in the preceding 12 months are liable to pay gratuity. If the number of employees in the same organization reduces to under 10, it will still have to pay the gratuity as per the regulations of the Act.