Dear Friends & Seniors, I need some clarification on continues service term used in Gratuity act. I explain my confusion with the help of an example.
An employee name “X” joined a company on 01/01/2013
He left his job on 30/08/2019.
Year wise payable days (PD) or days for which he was paid including paid leave and holidays but excluded unauthorized absent and leave without pay of Mr. X were
Year PD
2013 305
2014 350
2015 333
2016 230
2017 305
2018 299
2019 240
Question 1: Was Mr. “X” in continuous service?
Question 2: If yes, than for how many years?
Regards,
Rahul Sindhwani
From India, Varanasi
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8An employee name “X” joined a company on 01/01/2013
He left his job on 30/08/2019.
Year wise payable days (PD) or days for which he was paid including paid leave and holidays but excluded unauthorized absent and leave without pay of Mr. X were
Year PD
2013 305
2014 350
2015 333
2016 230
2017 305
2018 299
2019 240
Question 1: Was Mr. “X” in continuous service?
Question 2: If yes, than for how many years?
Regards,
Rahul Sindhwani
From India, Varanasi
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An employee shall be said to be in continuous service for a period if he has, for that period, been in uninterrupted service, including service which may be interrupted on account of sickness, accident, leave, absence from duty without leave (not being absence in respect of which an order treating the absence as a break in service has been passed in accordance with the standing orders, rules, or regulations governing the employees of the establishment), lay-off, strike, or a lock-out, or cessation of work not due to any fault of the employee, whether such uninterrupted or interrupted service was rendered before or after the commencement of this Act.
For the purposes of clause (2), the number of days on which an employee has actually worked under an employer shall include the days on which:
(i) he has been laid-off under an agreement or as permitted by standing orders made under the Industrial Employment (Standing Orders) Act, 1946 (20 of 1946), or under the Industrial Disputes Act, 1947 (14 of 1947), or under any other law applicable to the establishment;
(ii) he has been on leave with full wages, earned in the previous year;
(iii) he has been absent due to temporary disablement caused by an accident arising out of and in the course of his employment; and
(iv) in the case of a female, she has been on maternity leave; so, however, that the total period of such maternity leave does not exceed twelve weeks.
From the records shown, the Employee is in continuous service. Assuming the number of days is calendar years, as his date of entry is 01-01-2013, he is eligible for 7 years of gratuity (50% of the last drawn salary per year of service).
From India, Madras
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For the purposes of clause (2), the number of days on which an employee has actually worked under an employer shall include the days on which:
(i) he has been laid-off under an agreement or as permitted by standing orders made under the Industrial Employment (Standing Orders) Act, 1946 (20 of 1946), or under the Industrial Disputes Act, 1947 (14 of 1947), or under any other law applicable to the establishment;
(ii) he has been on leave with full wages, earned in the previous year;
(iii) he has been absent due to temporary disablement caused by an accident arising out of and in the course of his employment; and
(iv) in the case of a female, she has been on maternity leave; so, however, that the total period of such maternity leave does not exceed twelve weeks.
From the records shown, the Employee is in continuous service. Assuming the number of days is calendar years, as his date of entry is 01-01-2013, he is eligible for 7 years of gratuity (50% of the last drawn salary per year of service).
From India, Madras
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Dear Babu Alexander,
You have given a lengthy reply, quoting the extract of the Gratuity Act. Nevertheless, in the present case, the poster has mentioned the number of days for which he was paid. From the year 2013 until the current year, i.e. 2019, the employee had unauthorized absences, and he was not paid salaries and wages each year. Against this backdrop, how can the service be construed as "continuous"? Can you please explain?
I am writing this as a learner; therefore, please do not take my question otherwise.
Thanks,
Dinesh Divekar
From India, Bangalore
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You have given a lengthy reply, quoting the extract of the Gratuity Act. Nevertheless, in the present case, the poster has mentioned the number of days for which he was paid. From the year 2013 until the current year, i.e. 2019, the employee had unauthorized absences, and he was not paid salaries and wages each year. Against this backdrop, how can the service be construed as "continuous"? Can you please explain?
I am writing this as a learner; therefore, please do not take my question otherwise.
Thanks,
Dinesh Divekar
From India, Bangalore
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Mr. Dinesh Divekar,
I agree with your point. For any unauthorized absence, the management ought to have initiated disciplinary action as per standing orders and concluded a break in service, if any year, in writing, and it should have been communicated to the employee. Treating the absence as a break in service should have been done in accordance with the standing orders, rules, or regulations governing the employees of the establishment. In the absence of any such documentation, the employee is eligible for gratuity for that year if they had put in 240 days.
Warm regards,
From India, Madras
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I agree with your point. For any unauthorized absence, the management ought to have initiated disciplinary action as per standing orders and concluded a break in service, if any year, in writing, and it should have been communicated to the employee. Treating the absence as a break in service should have been done in accordance with the standing orders, rules, or regulations governing the employees of the establishment. In the absence of any such documentation, the employee is eligible for gratuity for that year if they had put in 240 days.
Warm regards,
From India, Madras
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Dear Mr. Babu Alexander,
Thank you for your clarifying reply. This implies that HR professionals should not initiate disciplinary action for employee absences. However, after imposing the punishment, it is crucial to communicate the forfeiture of gratuity to the employee. Timely communication is essential.
Thanks,
Dinesh Divekar
From India, Bangalore
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Thank you for your clarifying reply. This implies that HR professionals should not initiate disciplinary action for employee absences. However, after imposing the punishment, it is crucial to communicate the forfeiture of gratuity to the employee. Timely communication is essential.
Thanks,
Dinesh Divekar
From India, Bangalore
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Dear Mr. Alexander & Mr. Divekar,
Thank you for the information provided. I have some doubts which I would like to share.
1. In 2016, Mr. X received payment for only 230 days from the company (matter not related to layoff). In such a case, would it be considered as a complete year of service or not?
2. If not, can we consider his service as 6 years rather than 7 for the payment of gratuity?
Regards,
Rahul Sindhwani
From India, Varanasi
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Thank you for the information provided. I have some doubts which I would like to share.
1. In 2016, Mr. X received payment for only 230 days from the company (matter not related to layoff). In such a case, would it be considered as a complete year of service or not?
2. If not, can we consider his service as 6 years rather than 7 for the payment of gratuity?
Regards,
Rahul Sindhwani
From India, Varanasi
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I can answer the question only if I get the following information:
1) In 2016, how many days was the factory working at full strength of workmen?
2) The employee received payment for only 230 days. What happened to the remaining days? Was he on leave without wages, or on any medical leave?
Thank you.
From India, Madras
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1) In 2016, how many days was the factory working at full strength of workmen?
2) The employee received payment for only 230 days. What happened to the remaining days? Was he on leave without wages, or on any medical leave?
Thank you.
From India, Madras
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Dear Mr. Alexander, 1. Factory run on 301 days (close only on Sundays and other Holidays). 2. Mr. X was absent without any information. But this absenteeism was staggered e.g. 10 days at a time.
From India, Varanasi
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From India, Varanasi
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If you have not initiated any action for unauthorized absenteeism of X, then it is deemed 'authorized leave without wages'. "Leave, absence from duty without leave (not being absence in respect of which an order treating the absence as a break in service has been passed in accordance with the standing orders, rules, or regulations governing the employees of the establishment)." Then continuity of service is established.
From India, Madras
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From India, Madras
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Minimum Qualifying service for Gratuity under the Payment of Gratuity Act.docx