I have worked for 4 years and 210 days in my company. My company operates for 5 days a week. Now the questions are two:
1. Is there a provision in the gratuity act which entitles me to gratuity? I read somewhere that people with more than 190 days of service are eligible if they are working underground or if the company operates less than 6 days a week.
2. Does the company have any discretion in deciding the eligibility for gratuity if the employee has served less than 5 years?
I request you to please support the answers with references to cases or acts.
From India, Mumbai
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1. Is there a provision in the gratuity act which entitles me to gratuity? I read somewhere that people with more than 190 days of service are eligible if they are working underground or if the company operates less than 6 days a week.
2. Does the company have any discretion in deciding the eligibility for gratuity if the employee has served less than 5 years?
I request you to please support the answers with references to cases or acts.
From India, Mumbai
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You have worked for 4 years and 210 days. You are not eligible for Gratuity under the Payment of Gratuity Act since you have not completed 5 years of service.
Eligibility Criteria for Gratuity
Section 2(c), which deals with the definition of continuous service, in Explanation-I states that the employee is deemed to be in continuous service if he works for 190 days in case employed below the ground in a mine, or 240 days in other cases (i.e., 6 days working) except seasonal employment. According to this section, if the employee does not work for 190 days or 240 days as the case may be, he is not eligible for Gratuity for that year.
The Act nowhere mentions a 5-day week, but the proportion of 240 days per 6 days working comes to 190 days per 5 days working.
Company Discretion on Gratuity Eligibility
The company can have discretion in deciding the Gratuity eligibility in case the employee has served less than 5 years. You can give anything more than the Law.
Hope I have answered all your queries.
Regards,
From India, Mumbai
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2584Eligibility Criteria for Gratuity
Section 2(c), which deals with the definition of continuous service, in Explanation-I states that the employee is deemed to be in continuous service if he works for 190 days in case employed below the ground in a mine, or 240 days in other cases (i.e., 6 days working) except seasonal employment. According to this section, if the employee does not work for 190 days or 240 days as the case may be, he is not eligible for Gratuity for that year.
The Act nowhere mentions a 5-day week, but the proportion of 240 days per 6 days working comes to 190 days per 5 days working.
Company Discretion on Gratuity Eligibility
The company can have discretion in deciding the Gratuity eligibility in case the employee has served less than 5 years. You can give anything more than the Law.
Hope I have answered all your queries.
Regards,
From India, Mumbai
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Thanks for your feedback. However, I have seen the act on the Labour Ministry website, which gives 190 days of flexibility. Below is the link. Is this wrong, or has the act been subsequently changed?
http://labour.gov.in
From India, Mumbai
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http://labour.gov.in
From India, Mumbai
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Definition of Continuous Service Cwith ID Act.docx
Less than 5 years service - Eligibility for payment of gratuity.pdf