Dear All,
I have been working in a central government agency under a contractual position since July 2016. Since April 2018, I have been awarded a contract after a gap of 4-5 days. Kindly let me know whether I am eligible for gratuity.
From India, Delhi
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I have been working in a central government agency under a contractual position since July 2016. Since April 2018, I have been awarded a contract after a gap of 4-5 days. Kindly let me know whether I am eligible for gratuity.
From India, Delhi
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There are certain exceptions and clarifications that you should be aware of:
Completion of Continuous Service
To be eligible for gratuity, an employee must have completed at least five years of continuous service with the same employer. Continuous service is calculated from the date of joining to the date of leaving. If an employee has not completed five years but has worked for more than 4 years and 6 months, the service is generally considered as completed for the purpose of gratuity calculation.
Contractual Employees
Contractual employees are also eligible for gratuity if they fulfill the above-mentioned criteria. The nature of the contract (temporary, fixed-term, etc.) doesn't necessarily exclude an employee from gratuity if the continuous service requirement is met.
Government Employees
Government employees, including those in central government agencies, are covered by the Payment of Gratuity Act. The rules and eligibility criteria apply to them as well.
Service Breaks
The Act considers service breaks of up to 30 days as continuous service. However, service breaks due to resignation, termination for misconduct, or other reasons may impact the continuity of service for gratuity eligibility.
State-Specific Regulations
Some states may have their own gratuity regulations that can slightly vary from the central Act. You should also consider any state-specific rules that might apply.
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33Completion of Continuous Service
To be eligible for gratuity, an employee must have completed at least five years of continuous service with the same employer. Continuous service is calculated from the date of joining to the date of leaving. If an employee has not completed five years but has worked for more than 4 years and 6 months, the service is generally considered as completed for the purpose of gratuity calculation.
Contractual Employees
Contractual employees are also eligible for gratuity if they fulfill the above-mentioned criteria. The nature of the contract (temporary, fixed-term, etc.) doesn't necessarily exclude an employee from gratuity if the continuous service requirement is met.
Government Employees
Government employees, including those in central government agencies, are covered by the Payment of Gratuity Act. The rules and eligibility criteria apply to them as well.
Service Breaks
The Act considers service breaks of up to 30 days as continuous service. However, service breaks due to resignation, termination for misconduct, or other reasons may impact the continuity of service for gratuity eligibility.
State-Specific Regulations
Some states may have their own gratuity regulations that can slightly vary from the central Act. You should also consider any state-specific rules that might apply.
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Please clarify what you mean by Central Govt. Agency. The Payment of Gratuity Act being discussed in general in this forum is not meant for government departments, but it shall cover public sector units. Therefore, if you have been working in any government service on a fixed-term or temporary arrangement, you may refer to the service rules to know whether you are eligible for gratuity or not.
Applicability of Payment of Gratuity Act for Employees Under Fixed-Term Contract
The artificial breaks of a few days will not make the employee ineligible for gratuity. However, there are a few things to be observed.
One, there should be a minimum of five years' service from the date of joining till the date of exit.
Second, the service should be continuous or uninterrupted. Each year of 12 months shall have at least 240 days' working in order to make it uninterrupted. Obviously, a break in service of 4 to 5 days will not make it interrupted.
Third, extending the 240 days concept to the fifth year, some High Court judgments say that if an employee has rendered 4 years and 240 days in the fifth year, he will be eligible to get gratuity. This is still a question of law because under the Payment of Gratuity Act, it is still 5 years, and the matter of 240 days is purely technical to decide whether an employee has continuous service or not.
Four, for calculating the amount of gratuity, which is based on the last salary drawn and the length of service, a fraction of service of more than 6 months shall be rounded off to one year, and any fraction of less than 6 months shall be ignored. This does not mean that a service of four years and more than 6 months in the fifth year would make an employee qualify for gratuity. Under both high court verdicts, Kerala High Court's Shreeja Vs RJLC or Madras High Court's Mettur Bearsel's case, only 240 days in the fifth year has been granted as one year. Therefore, even if adapting these high court decisions, a minimum service of four years and 240 days is mandatory.
From India, Kannur
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Applicability of Payment of Gratuity Act for Employees Under Fixed-Term Contract
The artificial breaks of a few days will not make the employee ineligible for gratuity. However, there are a few things to be observed.
One, there should be a minimum of five years' service from the date of joining till the date of exit.
Second, the service should be continuous or uninterrupted. Each year of 12 months shall have at least 240 days' working in order to make it uninterrupted. Obviously, a break in service of 4 to 5 days will not make it interrupted.
Third, extending the 240 days concept to the fifth year, some High Court judgments say that if an employee has rendered 4 years and 240 days in the fifth year, he will be eligible to get gratuity. This is still a question of law because under the Payment of Gratuity Act, it is still 5 years, and the matter of 240 days is purely technical to decide whether an employee has continuous service or not.
Four, for calculating the amount of gratuity, which is based on the last salary drawn and the length of service, a fraction of service of more than 6 months shall be rounded off to one year, and any fraction of less than 6 months shall be ignored. This does not mean that a service of four years and more than 6 months in the fifth year would make an employee qualify for gratuity. Under both high court verdicts, Kerala High Court's Shreeja Vs RJLC or Madras High Court's Mettur Bearsel's case, only 240 days in the fifth year has been granted as one year. Therefore, even if adapting these high court decisions, a minimum service of four years and 240 days is mandatory.
From India, Kannur
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I am working at the Rajiv Gandhi National Institute of Youth Development, established under the Act of Parliament and under the aegis of the Ministry of Youth Affairs and Sports.
Issue with Pay
Secondly, please guide me as I am being paid less than the minimum DC rates in my area. What should be my further course of action?
From India, Delhi
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Issue with Pay
Secondly, please guide me as I am being paid less than the minimum DC rates in my area. What should be my further course of action?
From India, Delhi
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Since the period of service of two years will not qualify for gratuity, there is no point in determining the applicability of the Payment of Gratuity Act to your establishment. Regarding the payment of remuneration, the government follows a rate that is approved by themselves but not necessarily the rates to be followed by private establishments. Again, raising a dispute after the lapse of five years is meaningless. This is my opinion.
From India, Kannur
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From India, Kannur
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GRATUITY Calculator for Central Govt & Private Concern only.xls
Gratuity ceiling increased to Rs.20 lacs for Central Govt employees 4.8.2016.pdf