Hi,
I worked for a wealth advisory firm as a financial analyst from 16th April 2012 till 24th Feb 2017. I worked for more than 4 years and 240 days without any breaks in employment. They are denying to pay me gratuity, saying the 240-day rule is applicable for people underground (below ground) and for those who are not continuously employed for the 5th year. I was fully employed five days a week with them since 16th April 2012.
So, I want to know if my company is right or if I can raise a dispute against them.
Regards
From Canada, Calgary
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I worked for a wealth advisory firm as a financial analyst from 16th April 2012 till 24th Feb 2017. I worked for more than 4 years and 240 days without any breaks in employment. They are denying to pay me gratuity, saying the 240-day rule is applicable for people underground (below ground) and for those who are not continuously employed for the 5th year. I was fully employed five days a week with them since 16th April 2012.
So, I want to know if my company is right or if I can raise a dispute against them.
Regards
From Canada, Calgary
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Under Section 4 of the Payment Gratuity Act 1972, gratuity shall be payable to an employee on the termination of his employment after he has rendered continuous service for not less than 5 years.
Termination of employment may result from superannuation, retirement, resignation, death, or disablement due to accident/disease.
As held in the case of Darshan Engineering Works vs. Controlling Authority, where an employee continues to work after superannuation, he will be entitled to gratuity for the entire period and not only up to his superannuation.
The explanation to Section 4(1) states that disablement means such disablement as incapacitates an employee from the work which he was capable of performing before the accident or disease resulting in such disablement. Under Section 4(4), if an employee continues in his current employment after disablement at reduced wages, the gratuity for the period up to his disablement is to be calculated at such wages as he was being paid before disablement. The gratuity for the period after disablement is to be calculated based on such reduced wages.
According to provision 1 of Section 4(1), the provision of continuous service of 5 years shall not be necessary where the termination of employment happened due to death or disablement. In the case of death, the amount of gratuity is to be paid to the nominee. If no nomination was made, gratuity shall be paid to the heir. If the nominee or heir is a minor, then the amount of gratuity shall be submitted to the controlling authority. The minor can use this fund when he attains majority.
Continuous service is defined under Section 2-A as a period of uninterrupted service, including service that may be interrupted due to sickness, accident, leave, layoff, strike, lockout, cessation of work not due to any fault of the employees, and absence from duty without leave (not being absence in respect of which an order treating the action as a break in service has been passed in accordance with the standing orders, rules, or regulations governing the employees of the establishment).
In the case of Dalmia Magnesite Corporation vs. Regional Labour Commissioner Madras, it was held that if this service is interrupted for reasons other than those mentioned above, it shall be deemed to not have been continuous service.
If an employee, not being employed in a seasonal establishment, is not in continuous service for any period of 1 year, he shall be deemed to be in continuous service under the employer if, during the preceding 12 calendar months, he has actually worked under the employee for not less than 190 days in the case of an employee employed below ground in a mine or any establishment which works for less than 6 days in a week, and 240 days in any other case. Under clause 2 of Section 2A, when determining the continuous service for any period of 6 months rather than 1 year for the Payment of Gratuity, the number of days the employee should have actually worked should be half the number of days that constitute continuous service for a period of 1 year. This means that if we are calculating gratuity for a period of 6 months instead of 1 year, then 190 days will be replaced by 95 days and 240 days will be replaced by 120 days.
For the number of days an employee has been laid off under an agreement or as permitted by standing orders made under the Industrial Employment Standing Order Act, 1946, or under the Industrial Dispute Act, 1947, or under any other law applicable to the establishment, he shall be deemed to be in continuous service.
Similarly, if an employee has been on leave with full wages earned in the previous years or has been absent due to temporary disablement caused by an accident arising out of and in the course of his employment, he shall be deemed to be in continuous service. Additionally, if a female employee has been on maternity leave not exceeding 12 weeks, she shall be deemed to be in continuous service.
Under clause 3 of Section 2A, in the case of seasonal establishments, an employee shall be deemed to be in continuous service if he has worked for a period constituting 75% of the number of days on which the establishment was in operation in 6 months or 1 year.
For more information, please visit [Payment of Gratuity Act, Rules, Forms, Returns & All Other Information](http://www.shramsamadhan.com/p/payment-of-gratuity-act-rules.html).
From India, Kolkata
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180Termination of employment may result from superannuation, retirement, resignation, death, or disablement due to accident/disease.
As held in the case of Darshan Engineering Works vs. Controlling Authority, where an employee continues to work after superannuation, he will be entitled to gratuity for the entire period and not only up to his superannuation.
The explanation to Section 4(1) states that disablement means such disablement as incapacitates an employee from the work which he was capable of performing before the accident or disease resulting in such disablement. Under Section 4(4), if an employee continues in his current employment after disablement at reduced wages, the gratuity for the period up to his disablement is to be calculated at such wages as he was being paid before disablement. The gratuity for the period after disablement is to be calculated based on such reduced wages.
According to provision 1 of Section 4(1), the provision of continuous service of 5 years shall not be necessary where the termination of employment happened due to death or disablement. In the case of death, the amount of gratuity is to be paid to the nominee. If no nomination was made, gratuity shall be paid to the heir. If the nominee or heir is a minor, then the amount of gratuity shall be submitted to the controlling authority. The minor can use this fund when he attains majority.
Continuous service is defined under Section 2-A as a period of uninterrupted service, including service that may be interrupted due to sickness, accident, leave, layoff, strike, lockout, cessation of work not due to any fault of the employees, and absence from duty without leave (not being absence in respect of which an order treating the action as a break in service has been passed in accordance with the standing orders, rules, or regulations governing the employees of the establishment).
In the case of Dalmia Magnesite Corporation vs. Regional Labour Commissioner Madras, it was held that if this service is interrupted for reasons other than those mentioned above, it shall be deemed to not have been continuous service.
If an employee, not being employed in a seasonal establishment, is not in continuous service for any period of 1 year, he shall be deemed to be in continuous service under the employer if, during the preceding 12 calendar months, he has actually worked under the employee for not less than 190 days in the case of an employee employed below ground in a mine or any establishment which works for less than 6 days in a week, and 240 days in any other case. Under clause 2 of Section 2A, when determining the continuous service for any period of 6 months rather than 1 year for the Payment of Gratuity, the number of days the employee should have actually worked should be half the number of days that constitute continuous service for a period of 1 year. This means that if we are calculating gratuity for a period of 6 months instead of 1 year, then 190 days will be replaced by 95 days and 240 days will be replaced by 120 days.
For the number of days an employee has been laid off under an agreement or as permitted by standing orders made under the Industrial Employment Standing Order Act, 1946, or under the Industrial Dispute Act, 1947, or under any other law applicable to the establishment, he shall be deemed to be in continuous service.
Similarly, if an employee has been on leave with full wages earned in the previous years or has been absent due to temporary disablement caused by an accident arising out of and in the course of his employment, he shall be deemed to be in continuous service. Additionally, if a female employee has been on maternity leave not exceeding 12 weeks, she shall be deemed to be in continuous service.
Under clause 3 of Section 2A, in the case of seasonal establishments, an employee shall be deemed to be in continuous service if he has worked for a period constituting 75% of the number of days on which the establishment was in operation in 6 months or 1 year.
For more information, please visit [Payment of Gratuity Act, Rules, Forms, Returns & All Other Information](http://www.shramsamadhan.com/p/payment-of-gratuity-act-rules.html).
From India, Kolkata
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You can approach the controlling authority for denial of gratuity on the ground that you have not been in employment for 5 years continuously. Submit your application/arguments in writing and wait for the matter to be adjudicated. The company is well within its right to refuse payment of gratuity. However, as an aggrieved employee, you can question the action of management before the controlling authority.
From India, New Delhi
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From India, New Delhi
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As per Section 2(A) of the Gratuity Act (“Act”), if in case employee is not in continuous service of one year, he/she shall be deemed to be in continuous service of one year if he/she has, immediately preceding twelve calender months, worked under the employer for not less than –
o 190 Days (in case of employee employed in mines below ground)
o 190 Days (in case if employee employed in an establishment which works for less than six days in a week)
o 240 Days ( in any other case)
There are many judgments wherein the respective Courts have confirmed that the workmen, who is in continuous service and completed 240 days in each calendar year and being not seasonal employees, they are entitled to the benefit of Sections 4 and 7 of the Act.
From India, Delhi
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o 190 Days (in case of employee employed in mines below ground)
o 190 Days (in case if employee employed in an establishment which works for less than six days in a week)
o 240 Days ( in any other case)
There are many judgments wherein the respective Courts have confirmed that the workmen, who is in continuous service and completed 240 days in each calendar year and being not seasonal employees, they are entitled to the benefit of Sections 4 and 7 of the Act.
From India, Delhi
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Minimum Qualifying service for Gratuity under the Payment of Gratuity Act.docx