I have completed 4 years and 3 months of service and 6 months of training period. Will I be eligible for gratuity considering the 4 years 190 days rule (Gratuity Act - 2A)? If there have been any favorable judgments regarding this, please let me know.
From India, Chennai
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From India, Chennai
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Dear friend,
Definition of 'Employee' Under the Payment of Gratuity Act
The definition of the term 'employee' under Section 2(e) of the Payment of Gratuity Act, 1972, specifically excludes an apprentice from the purview of the Act. Section 2(a) of the Apprentices Act, 1961, defines an apprentice as a person undergoing training under a designated trade under a contract of apprenticeship. The EPF Act also does not apply to such apprentices, either under the Apprentices Act, 1961, or under a Scheme of Apprenticeship approved under the certified Standing Orders of an establishment. However, the EC Act, 1923, and the ESI Act, 1948, apply to them in view of the risk of employment accidents.
Therefore, a trainee appointed under a contract of employment cannot be excluded from the purview of the PGA, 1972, just by the literal meaning of the term 'apprentice' as employed in the definition under Section 2(e) of the Act. In this connection, you may refer to the judgment of the Honorable High Court of Orissa in the CMD, Orissa Mining Corporation Ltd. v. the Controlling Authority under the PGA, 1972 (1995).
Eligibility for Gratuity Based on 190 Days Rule
Regarding the 190 days question, you will be eligible for gratuity, including the period of training under the contract of employment, if your establishment works for less than 6 days in a week, provided your completed total service is 190 days in the 5th year.
From India, Salem
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6108Definition of 'Employee' Under the Payment of Gratuity Act
The definition of the term 'employee' under Section 2(e) of the Payment of Gratuity Act, 1972, specifically excludes an apprentice from the purview of the Act. Section 2(a) of the Apprentices Act, 1961, defines an apprentice as a person undergoing training under a designated trade under a contract of apprenticeship. The EPF Act also does not apply to such apprentices, either under the Apprentices Act, 1961, or under a Scheme of Apprenticeship approved under the certified Standing Orders of an establishment. However, the EC Act, 1923, and the ESI Act, 1948, apply to them in view of the risk of employment accidents.
Therefore, a trainee appointed under a contract of employment cannot be excluded from the purview of the PGA, 1972, just by the literal meaning of the term 'apprentice' as employed in the definition under Section 2(e) of the Act. In this connection, you may refer to the judgment of the Honorable High Court of Orissa in the CMD, Orissa Mining Corporation Ltd. v. the Controlling Authority under the PGA, 1972 (1995).
Eligibility for Gratuity Based on 190 Days Rule
Regarding the 190 days question, you will be eligible for gratuity, including the period of training under the contract of employment, if your establishment works for less than 6 days in a week, provided your completed total service is 190 days in the 5th year.
From India, Salem
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Umakanthan. M Sir, sorry to ask again about this 190 days thing. There are different views about this 240 days and 190 days. Kindly advise if the below information is correct:
- 240 days in the 5th year are considered for organizations operating for 6 or 7 days, and employees working above the ground level.
- 190 days are considered for organizations operating for a minimum of 5 days and employees working "below" the ground level.
I served in an organization (which operates on a 5-day working schedule) for 4 years, 7 months, and 5 days. However, my organization states that 8 months, i.e., 240 days, are needed for gratuity eligibility.
I'm just checking the possibilities to see if I can receive my gratuity.
Thanks in advance.
From India, Hyderabad
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- 240 days in the 5th year are considered for organizations operating for 6 or 7 days, and employees working above the ground level.
- 190 days are considered for organizations operating for a minimum of 5 days and employees working "below" the ground level.
I served in an organization (which operates on a 5-day working schedule) for 4 years, 7 months, and 5 days. However, my organization states that 8 months, i.e., 240 days, are needed for gratuity eligibility.
I'm just checking the possibilities to see if I can receive my gratuity.
Thanks in advance.
From India, Hyderabad
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The Payment of Gratuity Act, 1972 Sec. 3
Continuous Service
(1) For the purpose of this Act, an employee shall be said to be in continuous service for a period if he has, for that period, been in uninterrupted service. This includes service which may be interrupted on account of sickness, accident, leave, absence from duty without leave (not being absence in respect of which an order treating the absence as a break in service has been passed in accordance with the standing orders, rules, or regulations governing the employees of the establishment), lay-off, strike, or a lock-out or cessation of work not due to any fault of the employee, whether such uninterrupted or interrupted service was rendered before or after the commencement of this Act.
Where an employee (not being an employee employed in a seasonal establishment) is not in continuous service within the meaning of clause (1), for any period of one year or six months, he shall be deemed to be in continuous service under the employer:
(a) For the said period of one year, if the employee during the period of twelve calendar months preceding the date with reference to which calculation is to be made, has actually worked under the employer for not less than:
(i) One hundred and ninety days, in the case of an employee employed below the ground in a mine or in an establishment which works for less than six days in a week; and
(ii) Two hundred and forty days, in any other case.
(b) For the said period of six months if the employee during the period of six calendar months preceding the date with reference to which the calculation is to be made, has actually worked under the employer for not less than:
(i) Ninety-five days, in the case of an employee employed below the ground in a mine or in an establishment which works for less than six days in a week; and
(ii) One hundred and twenty days, in any other case.
[Explanation: For the purpose of clause (2), the number of days on which an employee has actually worked under an employer shall include the days on which:
(i) He has been laid-off under an agreement or as permitted by standing orders made under the Industrial Employment (Standing Orders) Act, 1946 (20 of 1946), or under the Industrial Disputes Act, 1947 (14 of 1947), or under any other law applicable to the establishment;
(ii) He has been on leave with full wages, earned in the previous year;
(iii) He has been absent due to temporary disablement caused by an accident arising out of and in the course of his employment; and
(iv) In the case of a female, she has been on maternity leave; so, however, that the total period of such maternity leave does not exceed twelve weeks].
(3) Where an employee, employed in a seasonal establishment, is not in continuous service within the meaning of clause (1), for any period of one year or six months, he shall be deemed to be in continuous service under the employer for such period if he has actually worked for not less than seventy-five percent of the number of days on which the establishment was in operation during such period.
From India, Hyderabad
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Continuous Service
(1) For the purpose of this Act, an employee shall be said to be in continuous service for a period if he has, for that period, been in uninterrupted service. This includes service which may be interrupted on account of sickness, accident, leave, absence from duty without leave (not being absence in respect of which an order treating the absence as a break in service has been passed in accordance with the standing orders, rules, or regulations governing the employees of the establishment), lay-off, strike, or a lock-out or cessation of work not due to any fault of the employee, whether such uninterrupted or interrupted service was rendered before or after the commencement of this Act.
Where an employee (not being an employee employed in a seasonal establishment) is not in continuous service within the meaning of clause (1), for any period of one year or six months, he shall be deemed to be in continuous service under the employer:
(a) For the said period of one year, if the employee during the period of twelve calendar months preceding the date with reference to which calculation is to be made, has actually worked under the employer for not less than:
(i) One hundred and ninety days, in the case of an employee employed below the ground in a mine or in an establishment which works for less than six days in a week; and
(ii) Two hundred and forty days, in any other case.
(b) For the said period of six months if the employee during the period of six calendar months preceding the date with reference to which the calculation is to be made, has actually worked under the employer for not less than:
(i) Ninety-five days, in the case of an employee employed below the ground in a mine or in an establishment which works for less than six days in a week; and
(ii) One hundred and twenty days, in any other case.
[Explanation: For the purpose of clause (2), the number of days on which an employee has actually worked under an employer shall include the days on which:
(i) He has been laid-off under an agreement or as permitted by standing orders made under the Industrial Employment (Standing Orders) Act, 1946 (20 of 1946), or under the Industrial Disputes Act, 1947 (14 of 1947), or under any other law applicable to the establishment;
(ii) He has been on leave with full wages, earned in the previous year;
(iii) He has been absent due to temporary disablement caused by an accident arising out of and in the course of his employment; and
(iv) In the case of a female, she has been on maternity leave; so, however, that the total period of such maternity leave does not exceed twelve weeks].
(3) Where an employee, employed in a seasonal establishment, is not in continuous service within the meaning of clause (1), for any period of one year or six months, he shall be deemed to be in continuous service under the employer for such period if he has actually worked for not less than seventy-five percent of the number of days on which the establishment was in operation during such period.
From India, Hyderabad
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Dear Prvn,
Some employers, particularly HR managers, misconceive the phrase "an establishment which works for less than six days in a week." Hence the confusion.
No Indian Labor Law, other than the State Shops and Establishments Acts, prescribes the maximum number of days an establishment could function in a week, month, or a year. Even in almost all the S&E Acts, the provision for a weekly closure day has been dispensed with nowadays, subject to the condition of granting a weekly holiday to employees on a rotation basis.
Therefore, the phrase regarding the functioning of the establishment would automatically refer to the weekly work schedule of the employees of the establishment only. When the employees are required to work for less than 6 days in a week, their continuous service has to be reckoned as per the formula given under subsection (2) of Section 2-A of the PGA, 1972, and not otherwise based on any literal interpretations.
One has to bear in mind the historical changes taking place in business administration era after era—ownership got separated from management after the advent of joint-stock companies, tools of work were separated from the workers after the formation of factories of large-scale production, and after the recent Covid-19, employees are separated from their formal workplace, giving rise to the work culture of working from home.
From India, Salem
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Some employers, particularly HR managers, misconceive the phrase "an establishment which works for less than six days in a week." Hence the confusion.
No Indian Labor Law, other than the State Shops and Establishments Acts, prescribes the maximum number of days an establishment could function in a week, month, or a year. Even in almost all the S&E Acts, the provision for a weekly closure day has been dispensed with nowadays, subject to the condition of granting a weekly holiday to employees on a rotation basis.
Therefore, the phrase regarding the functioning of the establishment would automatically refer to the weekly work schedule of the employees of the establishment only. When the employees are required to work for less than 6 days in a week, their continuous service has to be reckoned as per the formula given under subsection (2) of Section 2-A of the PGA, 1972, and not otherwise based on any literal interpretations.
One has to bear in mind the historical changes taking place in business administration era after era—ownership got separated from management after the advent of joint-stock companies, tools of work were separated from the workers after the formation of factories of large-scale production, and after the recent Covid-19, employees are separated from their formal workplace, giving rise to the work culture of working from home.
From India, Salem
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Umakanthan.M, Thank you very much for your input. I have conveyed the same to our organization and requested them to check the Gratuity Act again in detail. They understood the Act and sections and agreed to process my gratuity. Thanks to the Citehr team/forum for the opportunity to discuss issues and find possible solutions.
From India, Hyderabad
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From India, Hyderabad
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Less than 5 years service - Eligibility for payment of gratuity.pdf
Payment of Gratuity Act, 1972 & The Rules.ppt
THE PAYMENT OF GRATUITY ACT 1972.doc