Hi Madhu,
I worked at Tata Communications Ltd from 02 Jan 2007 until 05 Aug 2011, which totals 4 years and 215 days. The company operated on a 5-day workweek, and according to the Supreme Court (SC) order, 4 years and 190 days would qualify for gratuity.
In this scenario, would I be eligible for gratuity? The finance team claims that, based on Tata Trust rules, I must complete 5 years. Does the SC order not apply to trusts like Tata?
On the other hand, I am currently employed at an MNC in Hyderabad. They consider 4 years and 190 days as the period eligible for gratuity payment and have processed it. Why then is my former employer denying this by stating it doesn't apply to Tata Trust?
I need your assistance to proceed with this matter.
Thank you.
From India, Bangalore
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I worked at Tata Communications Ltd from 02 Jan 2007 until 05 Aug 2011, which totals 4 years and 215 days. The company operated on a 5-day workweek, and according to the Supreme Court (SC) order, 4 years and 190 days would qualify for gratuity.
In this scenario, would I be eligible for gratuity? The finance team claims that, based on Tata Trust rules, I must complete 5 years. Does the SC order not apply to trusts like Tata?
On the other hand, I am currently employed at an MNC in Hyderabad. They consider 4 years and 190 days as the period eligible for gratuity payment and have processed it. Why then is my former employer denying this by stating it doesn't apply to Tata Trust?
I need your assistance to proceed with this matter.
Thank you.
From India, Bangalore
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Dear All,
Kindly find attached the Bare Act of the Gratuity Act 1972. The extract of the section 2A is given below:-
Also i have attached the Gratuity Act 1972 Bare Act. Therefore it is very clear that the calculation is for 4 years 240 days.
Also all organisations irrespective of their own trust have to follow the rules. Their rules can differ if they are more beneficially to the employee than the present act.
The extract is below:-
The gratuity eligibility as per Gratuity Act 1972 is 5 years of continuous service. Sub section (2) of section 4 is for calculation of gratuity and not for the eligibility of gratuity.
But as per the judgment of the Supreme Court an employee is eligible for gratuity if he has completed 4 years of continuous service and 240 days continuous working in 5th year. On the day when he completes his 240 days in the 5th year he will be eligible for gratuity.
The judgment of Supreme Court rendered under the provisions of the Industrial Dispute Act in Surendra Kumar Verma vs. Central Govt. Industrial Tribunal,[(1980) (4) S.C.C.433)], it is enough that an employee has a service of 240 days in the preceding 12 months 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."
Now almost all organizations are paying gratuity if an employee has completed 4 years of continuous service and 240 days continuous working in 5th year.
Regards,
Ashutosh Thakre
From India, Mumbai
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282Kindly find attached the Bare Act of the Gratuity Act 1972. The extract of the section 2A is given below:-
Also i have attached the Gratuity Act 1972 Bare Act. Therefore it is very clear that the calculation is for 4 years 240 days.
Also all organisations irrespective of their own trust have to follow the rules. Their rules can differ if they are more beneficially to the employee than the present act.
The extract is below:-
The gratuity eligibility as per Gratuity Act 1972 is 5 years of continuous service. Sub section (2) of section 4 is for calculation of gratuity and not for the eligibility of gratuity.
But as per the judgment of the Supreme Court an employee is eligible for gratuity if he has completed 4 years of continuous service and 240 days continuous working in 5th year. On the day when he completes his 240 days in the 5th year he will be eligible for gratuity.
The judgment of Supreme Court rendered under the provisions of the Industrial Dispute Act in Surendra Kumar Verma vs. Central Govt. Industrial Tribunal,[(1980) (4) S.C.C.433)], it is enough that an employee has a service of 240 days in the preceding 12 months 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."
Now almost all organizations are paying gratuity if an employee has completed 4 years of continuous service and 240 days continuous working in 5th year.
Regards,
Ashutosh Thakre
From India, Mumbai
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Hi Ashutosh Thakre,
Thank you for your detailed information. So, if the organization is working 5 days a week, can the 5th year be considered as 190 days? For example, would it be 4 years and 190 days if the company follows a 5-day week and 4 years and 240 days when the company follows a 6-day week?
I appreciate your response.
From India, Bangalore
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Thank you for your detailed information. So, if the organization is working 5 days a week, can the 5th year be considered as 190 days? For example, would it be 4 years and 190 days if the company follows a 5-day week and 4 years and 240 days when the company follows a 6-day week?
I appreciate your response.
From India, Bangalore
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For an establishment working for 5 days in a week, 240 shall be taken as 190 days. This is as per the Gratuity Act itself. The eligibility service remains 5 years from the date of joining, although there are court verdicts interpreting the requirement of 240 days or 190 days, as the case may be. The mandatory days for deciding continuous service, as one year of service is provided the employee has already completed 4 years in the preceding service period. A similar ruling has come from the Kerala High Court, stating that an employee who has worked for 4 years and 240 days (190 days for establishments working for 5 days in a week) is eligible for gratuity, considering that 240/190 days will constitute one year (Sreeja Vs. Regional Labour Commissioner [2015 LLR826]).
Ashutosh: Please share the Supreme Court ruling you have mentioned in your post.
Madhu.T.K
From India, Kannur
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Ashutosh: Please share the Supreme Court ruling you have mentioned in your post.
Madhu.T.K
From India, Kannur
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Dear Ashutosh Thakre ji,
The Supreme Court judgment that you have quoted does not pertain to the Gratuity Act but rather to the provisions under the ID Act.
In this thread four years ago, Mr. Madhu and Rajanassociates shared their opinions. Mr. Madhu is a Super Moderator of our forum with vast experience in Industrial Relations. Rajanassociates are legal counsels/advocates practicing in the field of labor laws for a considerable period. However, you held a different opinion from theirs.
It is acceptable to disagree with someone, but it should be done with thorough knowledge.
I have a simple question for you: If there was a Supreme Court judgment on this subject in 1980, how did the Madras High Court and Kerala High Court admit similar cases after 1980?
Our concern is with the law and not with what is commonly practiced. Practices are adopted by people who presume that what they know reflects the law. In a recent discussion, an HR manager stated that gratuity is deducted from the salary and given later upon separation.
I apologize for my straightforwardness. I couldn't hold back my thoughts.
From India, Mumbai
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The Supreme Court judgment that you have quoted does not pertain to the Gratuity Act but rather to the provisions under the ID Act.
In this thread four years ago, Mr. Madhu and Rajanassociates shared their opinions. Mr. Madhu is a Super Moderator of our forum with vast experience in Industrial Relations. Rajanassociates are legal counsels/advocates practicing in the field of labor laws for a considerable period. However, you held a different opinion from theirs.
It is acceptable to disagree with someone, but it should be done with thorough knowledge.
I have a simple question for you: If there was a Supreme Court judgment on this subject in 1980, how did the Madras High Court and Kerala High Court admit similar cases after 1980?
Our concern is with the law and not with what is commonly practiced. Practices are adopted by people who presume that what they know reflects the law. In a recent discussion, an HR manager stated that gratuity is deducted from the salary and given later upon separation.
I apologize for my straightforwardness. I couldn't hold back my thoughts.
From India, Mumbai
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Dear All, The extract of the case is attached herewith. The SC ruling i shall update by coming Monday. Regards, Ashutosh Thakre
From India, Mumbai
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From India, Mumbai
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Dear Mr. Koregaonkar,
Thank you for the frank reply. I understand that the case was under the ID ACT, but it was regarding gratuity. The Supreme Court has clearly stated that the definition of continuous service in the Industrial Dispute Act and the Payment of Gratuity Act are synonymous. Therefore, the same principle can be applied under this act as well. An employee who has served for 4 years, 10 months, and 11 days is considered to have completed 5 years of continuous service under sec. 4(2) and is thus eligible for gratuity.
I hope this clarifies your doubts.
Regards,
Ashutosh Thakre
From India, Mumbai
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Thank you for the frank reply. I understand that the case was under the ID ACT, but it was regarding gratuity. The Supreme Court has clearly stated that the definition of continuous service in the Industrial Dispute Act and the Payment of Gratuity Act are synonymous. Therefore, the same principle can be applied under this act as well. An employee who has served for 4 years, 10 months, and 11 days is considered to have completed 5 years of continuous service under sec. 4(2) and is thus eligible for gratuity.
I hope this clarifies your doubts.
Regards,
Ashutosh Thakre
From India, Mumbai
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Dear Thakre ji,
You have not answered my question. I have no doubt in my mind, and I am very clear on the subject. I am starting to feel that I am unnecessarily spending my time sharing my knowledge on this forum.
From India, Mumbai
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You have not answered my question. I have no doubt in my mind, and I am very clear on the subject. I am starting to feel that I am unnecessarily spending my time sharing my knowledge on this forum.
From India, Mumbai
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Dear Learned Members of this Forum,
To conclude this subject, please find attached a judgment of Hon’ble Supreme Court in Grand Kakatiya Sheraton Hotel & Towers
Employees & Workers Union v. Srinivasa Resorts Ltd. & Ors. delivered on 27.02.2009.
Hon’ble Supreme Court in this case upheld the judgment of the Andhra Pradesh High Court, by which that court had struck down as unconstitutional the provisions of the Andhra Pradesh Shops and Establishments Act by which gratuity was made payable even to employees who had not completed 5 years service as per the Payment of Gratuity Act, 1972.
Given below is some text verbatim on page 11 of the Judgment:
"It is already held by this Court time and again that the concept of gratuity as conceived in the Payment of Gratuity Act and even earlier to that in labour jurisprudence is that gratuity is a reward for long and continuous service. It is for the first time by that Act, a worker or an employee was made entitled to the gratuity by his rendering continuous service for five years. If this is so, then providing only one year for entitlement to get the gratuity, is certainly unreasonable."
In light of above, my humble request to the learned members of this forum to conclude this subject. No further contribution from my side will be done on this topic unless some one raise a question of law.
From India, Mumbai
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To conclude this subject, please find attached a judgment of Hon’ble Supreme Court in Grand Kakatiya Sheraton Hotel & Towers
Employees & Workers Union v. Srinivasa Resorts Ltd. & Ors. delivered on 27.02.2009.
Hon’ble Supreme Court in this case upheld the judgment of the Andhra Pradesh High Court, by which that court had struck down as unconstitutional the provisions of the Andhra Pradesh Shops and Establishments Act by which gratuity was made payable even to employees who had not completed 5 years service as per the Payment of Gratuity Act, 1972.
Given below is some text verbatim on page 11 of the Judgment:
"It is already held by this Court time and again that the concept of gratuity as conceived in the Payment of Gratuity Act and even earlier to that in labour jurisprudence is that gratuity is a reward for long and continuous service. It is for the first time by that Act, a worker or an employee was made entitled to the gratuity by his rendering continuous service for five years. If this is so, then providing only one year for entitlement to get the gratuity, is certainly unreasonable."
In light of above, my humble request to the learned members of this forum to conclude this subject. No further contribution from my side will be done on this topic unless some one raise a question of law.
From India, Mumbai
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Dear Mr. Koregaonkar,
My humble request is to please clarify where in the attached case the court ordered a continuous 5 years of working, which is not equivalent to 4 years and 240 days. The entire case is viewed from a different angle. The discussion we are all trying to understand is whether 5 continuous years of service are equivalent to 4 years, 240 days, or 190 days.
Regarding your question about why the court admitted the cases if they had a verdict before, I am very sorry, but not being a lawyer, I shall not be able to comment on the same.
Regards,
Ashutosh Thakre
From India, Mumbai
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My humble request is to please clarify where in the attached case the court ordered a continuous 5 years of working, which is not equivalent to 4 years and 240 days. The entire case is viewed from a different angle. The discussion we are all trying to understand is whether 5 continuous years of service are equivalent to 4 years, 240 days, or 190 days.
Regarding your question about why the court admitted the cases if they had a verdict before, I am very sorry, but not being a lawyer, I shall not be able to comment on the same.
Regards,
Ashutosh Thakre
From India, Mumbai
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