Am I Eligible for Gratuity? Confused About Counting My 5 Years of Service with Unpaid Leave

Hello, can someone please help with the calculation of continuous service (i.e., 5 years)? I have served in an organization from 9th December 2019 to 8th November 2024, with an unpaid leave of 3 months due to personal reasons from 1st April '23 to 30th July '23.

The employer is denying paying gratuity, saying that I didn't complete 5 years of service because of my leave. I am calculating 5 years from 2020 to 2024. Will 2023 be counted as a full year of service in my case?

Hi, if that 3-month unpaid leave is approved, then this period should also be considered for the purpose of calculating gratuity. The employer cannot deny this.

Dear,

As per the Gratuity Act, if an employee completes 4 years and 240 days of service in the 5th year, he/she is eligible for gratuity.

Thank you.

Will my one-year internship period be considered for gratuity, or will only the full-time employment period be considered?

Gratuity Eligibility Under the Payment of Gratuity Act

As per the Payment of Gratuity (PG) Act, gratuity is payable after rendering 5 years of continuous service. Further, the period short of 6 months is not reckoned, and if it exceeds 6 months, it is considered as a full year. In your case, you have rendered 4 years and 11 months of service with 3 months of unpaid leave. If the unpaid leave was granted/approved by the Competent Authority, the gratuity is payable. Even if the period is not reckoned as continuous service, the period of service is 4 years and 8 months, which amounts to 5 years, as per the rule given in the PG Act.

So, in my opinion, gratuity is payable under the PG Act.

Even if the unpaid leave is not approved, if the employer has not issued an order to the employee treating that unpaid leave as a break in service as per the terms of employment or rules of the company, that period of absence is considered as uninterrupted service.