In the Payment of Gratuity Act, it is mentioned that gratuity eligibility requires continuous service of 5 years. My query is, should we calculate gratuity only when an employee completes 240 days in a year? If not, should we ignore the gratuity of an employee for that year?
If this is the case, could someone kindly provide a copy of the relevant order?
From India, Pune
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If this is the case, could someone kindly provide a copy of the relevant order?
From India, Pune
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Dear Hemantkumar,
As per the act, you cannot deviate to void one year for calculation just because he/she had not worked for 240 days in the year. It is about Date of Joining (DOJ) and Date of Leaving (DOL). You need to count the same tenure.
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384As per the act, you cannot deviate to void one year for calculation just because he/she had not worked for 240 days in the year. It is about Date of Joining (DOJ) and Date of Leaving (DOL). You need to count the same tenure.
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Hi Hemanth,
It is actually based on your Employer. It is enough if the employee works for 240 days in the preceding 12 months ( after completion of 4th year) and it is not necessary that he should have completed one whole year’s service.
As the definition of continuous service in Industrial Dispute Act and Payment of Gratuity Act are synonymous, the same principal can be adopted under the act also and hence an employee rendering service of 4 year 10months 11days is considered to have completed 5 years continuous service under sec.4(2) and thereby is eligible for gratuity.
4 years and 6 months (190 days = 1 year) where the company follows 5 day a week
4 years and 8 months ( 240 days = 1 year) where the company follows 5 day a week is eligible for gratuity.
You can copy paste the below link for your reference
https://www.linkedin.com/pulse/gratu...ce-rahul-kumar
From India
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It is actually based on your Employer. It is enough if the employee works for 240 days in the preceding 12 months ( after completion of 4th year) and it is not necessary that he should have completed one whole year’s service.
As the definition of continuous service in Industrial Dispute Act and Payment of Gratuity Act are synonymous, the same principal can be adopted under the act also and hence an employee rendering service of 4 year 10months 11days is considered to have completed 5 years continuous service under sec.4(2) and thereby is eligible for gratuity.
4 years and 6 months (190 days = 1 year) where the company follows 5 day a week
4 years and 8 months ( 240 days = 1 year) where the company follows 5 day a week is eligible for gratuity.
You can copy paste the below link for your reference
https://www.linkedin.com/pulse/gratu...ce-rahul-kumar
From India
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Gratuity-Contin uous Service-countin g broken period with same employer-Madras HC Judgment.docx
Less than 5 years service - Eligibility for payment of gratuity.pdf