Understanding Gratuity Eligibility After a 10-Year Service with a Short Break: What Counts?

Hi all, I am working in a steel detailing company. When I joined the company in November 2014, more than 20 people were working but not registered. Later, in 2017, the company was registered, and I resigned in September 2020. I rejoined the same company within 2 months in December 2020 and have continued until now. So, I have 10+ years of service with a 2-month service break. Can I get a gratuity? If yes, how many years will be calculated for gratuity?

Note: While resigning, I had a 6-year service period, and the company did not give any gratuity.

Yes, you are qualified for a gratuity because you have worked continuously for more than five years, including the time before the two-month hiatus, as long as the break falls within the guidelines for gratuities. The whole eligible service time, omitting any notable pauses, is used to compute gratuity.

In your instance, your service from December 2020 to the present and from November 2014 to September 2020 (6 years) will be combined. This equates to more than ten years of service, which will be taken into account when calculating gratuities. It's best to have a conversation with your employer to make sure your tenure is properly acknowledged and to get clarification on the gratuity payment procedure.

Clarification on Gratuity Eligibility

You need to clarify one aspect: from 2014 to September 2020, is it continuous service? If yes, there is no worry, as gratuity is applicable for having completed 5 years of service. It is advisable to file your claim with your employer as per the act and see what happens. However, since you mentioned you are still working there, the payment of gratuity will not arise now. The company, whether registered or otherwise, will not alter the eligibility criteria.

Also, go through the discussion on similar grounds in this link for more clarity: https://ftp.citehr.com/showthread.php?p=2493648. Please review the attached judgment of the Madras HC on the delay in filing the application, which I hope will shed some light on this issue.

You are eligible for gratuity for your service from November 2014 to September 2020. However, you are not eligible for the second spell as you have resigned, and the management might have relieved you from service.

Regards, Varghese Mathew

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Dear Friend,

You were working in a company with twenty employees on the roll during the year 2014, and you joined the company in November 2014. You resigned from the service in September 2020. Further, you rejoined the same company after 2 months, i.e., in December 2020, and have continued till now.

Clarification Needed

The line is not understood: 1. "But not registered" as what? 2. The company was registered in 2017.

Eligibility for Gratuity

The Payment of Gratuity Act states that the Payment of Gratuity Act, 1972 applies to the following establishments in India: Factories, Mines, Oil fields, Plantations, Ports, Railways, Motor transport undertakings, Companies, Shops, and other establishments that employ 10 or more people. Therefore, you are eligible for gratuity for the period from November 2014 to September 2020. However, you will not be eligible for gratuity for the second spell of service from December 2020 till now as it has not completed five years of service.

In my suggestion, you can file a case before the District Labour Officer for the claim of gratuity for the period of 2014-2020. However, the claim may not stand due to any delays.

At the outset, it appears that the whole situation is confusing.

Infancy Period Consideration

Prior to registration, was the company under an infancy period (where statutory clauses are not applicable for 3 years)?

Continuous Service Requirement

Need to know whether you have fulfilled the "Continuous Service" requirement to be eligible for gratuity.