I worked from February 15, 2006, to September 30, 2010. My total service period is 4 years, 7 months, and 16 days. I have asked for gratuity as per Section 4(2), which states that "For every completed year of service or part thereof in excess of six months, the employer shall pay gratuity to an employee at the rate of fifteen days' wages based on the rate of wages last drawn by the employee concerned: Provided that in the case of a piece-rated employee, daily wages shall be computed..." Still, my Finance and Accounts Department is not paying me, stating that I have not completed 240 days in a year. I have been given the understanding that 4 years, 7 months, and 16 days are treated as 5 years. Please guide.
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Computation of Gratuity Under Section 4(2)
Section 4(2) that you have referred to is all about the computation of gratuity for those who are entitled to receive it. This means that if you have worked for 5 years and above, let's say 5 years and seven months, the excess of 6 months would be rounded off to one year. Therefore, for the calculation of the gratuity amount, the length of service considered would be six years.
Interpretations of Section 2A on Continuous Service
Simultaneously, there are interpretations of section 2A concerning continuous service, which includes 240 days in the fifth year as eligibility for gratuity. For establishments that operate for less than 6 days in a week, the required number of days is 190. However, even in such scenarios, the mentioned 240 or 190 days should fall within a 12-month period. Therefore, working for 240/190 days in 7 months may not qualify you for gratuity.
From India, Kannur
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4526Section 4(2) that you have referred to is all about the computation of gratuity for those who are entitled to receive it. This means that if you have worked for 5 years and above, let's say 5 years and seven months, the excess of 6 months would be rounded off to one year. Therefore, for the calculation of the gratuity amount, the length of service considered would be six years.
Interpretations of Section 2A on Continuous Service
Simultaneously, there are interpretations of section 2A concerning continuous service, which includes 240 days in the fifth year as eligibility for gratuity. For establishments that operate for less than 6 days in a week, the required number of days is 190. However, even in such scenarios, the mentioned 240 or 190 days should fall within a 12-month period. Therefore, working for 240/190 days in 7 months may not qualify you for gratuity.
From India, Kannur
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240 days Gratuity Act-Case Law.doc
Research Paper on 240 days-Qualifying period for gratuity under Payment of Gratuity Act.pdf