Understanding Payment of Gratuity: Eligibility, Computation, and Legal Insights - CiteHR

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Gratuity - Is anybody entitled to gratuity if they have worked for 4 years and 9 months?

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From India, Udaipur
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Hi,

You have been working for 4.9 years in the company, and according to the law, those who have completed 5 years in one organization are entitled to gratuity. Therefore, you can't claim gratuity.


From India, Delhi
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Gratuity

Eligibility:
• An employee with a continuous service of a minimum of five years is eligible, subject to the provisions of the Payment of Gratuity Act, 1972. The qualifying period of five years of service will not apply in the case of an employee who dies in harness or suffers total and permanent disablement.

Conditions:
• Gratuity is payable on retirement, resignation, death, or physical disablement.
• Gratuity may be wholly or partially withheld if the employee is discharged or dismissed from service on disciplinary grounds.


Computation

[LEFT]• @ 15 days of last drawn basic salary for each completed year of continuous service. Service of six months and above will be considered as a full year, and service of less than six months will be ignored.
• The period of service is calculated from the date of the employee joining the Company or any of the Group companies.
• The benefits under the scheme are subject to the provisions of the Payment of Gratuity Act, 1972.

Regards,
Chandra Sekhar.

From India, Hyderabad
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Dear,

Gratuity can only be claimed after completion of 5 years of service in the same company.


From India, Pune
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Hi,
Is this applicable for MNC employee ?
I am working in MNC in IT dept and nothing mention for Gratuity in my Offer letter or Confirmation Letter.

So if i complete 5+ years, will i applicable for Gratuity ?
Thanks,

From India, Bangalore
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As per law a person worked for more than 4years 6 months is eligible for Gratuity. I have claimed the gratuity number of times for employees have completed 4 years and Seven months
From India, Mumbai
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From Singapore, Singapore
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Dear Kavita,

If any employee worked for 4 years and completes 240 days in the 5th year, they are eligible for gratuity.

Govind Pawar


From India, Mumbai
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Dear Member, Which of the section of the P G Act, 1972 say so? With Regards, R.N.Khola
From India, Delhi
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A Person who hav crossed minimum 4.6 and above in d same company he entitled to get gratutity
From India, Madras
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If ten or more employees are working there, then you will be eligible to receive a gratuity payment upon completion of five years of continuous service with the same employer.

With Regards,
R.N.Khola

Gratuity Eligibility for MNC Employees

Hi, is this applicable for MNC employees? I am working in an MNC in the IT department, and nothing is mentioned about gratuity in my Offer Letter or Confirmation Letter. So if I complete 5+ years, will I be eligible for gratuity?

Thanks,
Regards

From India, Delhi
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Hi, I agree with Mr.Govin Pawar. An employee who completed 4 years and 240 days in 5th year is eligible for Gratuity. regards prakash
From India, Madras
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Dear Deepak, But if the company gives you the offer letter with gratuity deductions its fine. Regards, Chandra sekhar
From India, Hyderabad
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As per the ruling of the Hon'ble High Court, if any person completes 4 years and in the 5th year has worked for 240 days, the concerned individual is entitled to receive Gratuity benefits.

Thanks, AK Sharma

From India, Pune
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I agree with Mr.Govind Pawar. As per many recent case laws, it is held gratuity will be payable if an employee puts in 4yrs & 240 days days in the fifth Year. B.R.MoHAN Bangalore
From India, Bangalore
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PAYMENT OF GRATUITY ACT

Gratuity is payable on death even if the 5 years have not been completed.

This is for your information that if employees have not completed their 5 years, they are eligible for gratuity.

On Condition:

If an employee completes 4 years of service and has finished 240 days in the 5th year, then they are entitled to 5 years of gratuity.

Section 4 of the Payment of Gratuity Act, 1972 provides that an employee will be entitled to gratuity upon completion of continuous service of 5 years. The Andhra Pradesh High Court clarified that the minimum period for eligibility for gratuity should not be less than 5 years, as it must constitute a complete 5-year service. It was further explained that the phrase "or part in excess of six months" is solely for calculating gratuity for subsequent years after the initial 5 years. Additionally, it was ruled that an employee who has worked for 4 years, 11 months, and 10 days is not eligible for gratuity due to not completing 5 years. In a separate case, the Madras High Court, relying on the Supreme Court's clarification regarding 240 working days in a year constituting continuous service, stated that complete 12 calendar months of service are not necessary. The Madras High Court also confirmed that an employee with 4 years, 10 months, and 18 days of service within 5 years is entitled to gratuity.

Case Ref.: Mettur Beardsell Ltd., Madras v. Regional Lab. Commissioner (Appellate Authority under Payment of Gratuity Act), Madras etc., 1998 (3) LLN 414

Further, in a subsequent case, the Madras High Court, referring to the Supreme Court's clarification on 240 working days in a year as continuous service, reiterated that complete 12 calendar months of service are not required. The Madras High Court also affirmed that an employee with 4 years, 10 months, and 18 days of service within 5 years is eligible for gratuity.

Case Ref.: Mettur Beardsell Ltd., Madras v. Regional Lab. Commissioner (Appellate Authority under Payment of Gratuity Act), Madras etc., 1998 (3) LLN 414.

Regards,
R K

From United States, Bentonville
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Gratuity as Part of CTC

Gratuity is included in the CTC and hence is part of the amount payable to the employee. The company shows gratuity as part of the CTC from day one. Therefore, in all fairness, the gratuity amounts provided during the tenure of an employee who has worked for less than the period required for qualifying for gratuity should be paid to them as an ex-gratia payment by the company. Many companies provide for gratuity only after the completion of 5 years of service and do not make gratuity a part of the CTC.

From India, Mumbai
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