I worked in a company from 12/02/2008 till 07/10/2013. Am I eligible for gratuity?
I rejoined the same company on 12/16/2013 and went on maternity leave on 04/04/2019. Since I had adopted a child less than 3 months old, I was entitled to only 12 weeks ML (till 07/04/2020). However, my employer accommodated me and allowed me to extend my ML until my baby was a year old. I was supposed to return to work in April 2020. Due to the Covid-19 situation, they requested me to wait until everything settled before returning (all communication was verbal and through text messages, no emails). In August, my HR contacted me and suggested that I resign since there was not much work, and I agreed since I wanted to dedicate more time to my child.
I know I am eligible for gratuity. But until what date?
Please help. Thank you for your time and patience.
Anu
From India, Bengaluru
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I rejoined the same company on 12/16/2013 and went on maternity leave on 04/04/2019. Since I had adopted a child less than 3 months old, I was entitled to only 12 weeks ML (till 07/04/2020). However, my employer accommodated me and allowed me to extend my ML until my baby was a year old. I was supposed to return to work in April 2020. Due to the Covid-19 situation, they requested me to wait until everything settled before returning (all communication was verbal and through text messages, no emails). In August, my HR contacted me and suggested that I resign since there was not much work, and I agreed since I wanted to dedicate more time to my child.
I know I am eligible for gratuity. But until what date?
Please help. Thank you for your time and patience.
Anu
From India, Bengaluru
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Hi Anu,
Regarding gratuity for the first spell i.e. 2.12.2008 till 10.7.2013 - if you have a continuous service of 4 years + 240 days during the 5th year, uninterrupted service, you are eligible to receive the gratuity under the Gratuity Act. This is not considering your 2nd spell. Then,
It's not clear whether you have left the very same company on 10.7.2013? Resigned or otherwise? Subject to confirmation of this fact, it's presumed there is a gap in service between 10.7.13 and 16.12.2013 (DoRJ) i.e. about 5 months, hence your service has been interrupted. If yes, this 2nd spell cannot be combined with the first spell of 4 years + >240 days.
Having availed maternity leave from 4.4.2019 to 4.7.2020 and even if treated as continued till date (since no mention about effective rejoining after maternity leave), the required service of 5 years and above can be considered as eligible for the 2nd spell, i.e. 16.12.13 to 4.7.2020 as well. It's necessary to determine the effective date of separation for the 2nd spell before ascertainment.
However, if there is a possibility to consider your case under the new Labour Codes, still to be implemented, the perception is likely to change.
From India, Bangalore
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1158Regarding gratuity for the first spell i.e. 2.12.2008 till 10.7.2013 - if you have a continuous service of 4 years + 240 days during the 5th year, uninterrupted service, you are eligible to receive the gratuity under the Gratuity Act. This is not considering your 2nd spell. Then,
It's not clear whether you have left the very same company on 10.7.2013? Resigned or otherwise? Subject to confirmation of this fact, it's presumed there is a gap in service between 10.7.13 and 16.12.2013 (DoRJ) i.e. about 5 months, hence your service has been interrupted. If yes, this 2nd spell cannot be combined with the first spell of 4 years + >240 days.
Having availed maternity leave from 4.4.2019 to 4.7.2020 and even if treated as continued till date (since no mention about effective rejoining after maternity leave), the required service of 5 years and above can be considered as eligible for the 2nd spell, i.e. 16.12.13 to 4.7.2020 as well. It's necessary to determine the effective date of separation for the 2nd spell before ascertainment.
However, if there is a possibility to consider your case under the new Labour Codes, still to be implemented, the perception is likely to change.
From India, Bangalore
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On 10/07/2013, I was relieved. It’s 222 Days in the 5th year so I assume I’m not eligible.
And on 16/12:2013 I rejoined, considered as a new employment.
Now after I went on ML, I didn’t resume to duty. My 12 weeks ML exhausted in July but I with permission from my boss extended it till April 2020 on Phone and email. But in April 2020, due to the covid situation, they asked me to not join and wait it out.
In august, they asked me to resign, I sent an email. And they officially relieved me on 25/08/2020.
From India, Bengaluru
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And on 16/12:2013 I rejoined, considered as a new employment.
Now after I went on ML, I didn’t resume to duty. My 12 weeks ML exhausted in July but I with permission from my boss extended it till April 2020 on Phone and email. But in April 2020, due to the covid situation, they asked me to not join and wait it out.
In august, they asked me to resign, I sent an email. And they officially relieved me on 25/08/2020.
From India, Bengaluru
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Thank you Mr. Kumar for taking the time to write. Also, may I please ask what are the new labor codes that you’ve mentioned?
From India, Bengaluru
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From India, Bengaluru
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Yes, for the 2nd spell, 6 yr + >6 months = 7 yrs, gratuity is payable to you.
Please read the attached materials on New Labour codes awaiting notification of the effective date after completing other formalities. These 4 Labour Codes comprise many rationalizations of various provisions and will replace and subsume many labour-related Acts/laws currently in effect. There are provisions that ultimately favor labor reforms, while on the other hand, some provisions are not as pro-labor. You can find a summary in the attachment. For detailed reading, you can log in to the website of the Labour Dept. GoI, where gazetted notifications can be downloaded.
From India, Bangalore
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Please read the attached materials on New Labour codes awaiting notification of the effective date after completing other formalities. These 4 Labour Codes comprise many rationalizations of various provisions and will replace and subsume many labour-related Acts/laws currently in effect. There are provisions that ultimately favor labor reforms, while on the other hand, some provisions are not as pro-labor. You can find a summary in the attachment. For detailed reading, you can log in to the website of the Labour Dept. GoI, where gazetted notifications can be downloaded.
From India, Bangalore
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Thanks for all the material. I’ll definitely go through them. I’d a quick question though...
For the second spell, I was told by my HR that I’m entitled for gratuity only till my 04/07/20219. Since I was on an extended ML, the period from July 2019 till august 2020, isn’t considered. Is that correct?
From India, Bengaluru
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For the second spell, I was told by my HR that I’m entitled for gratuity only till my 04/07/20219. Since I was on an extended ML, the period from July 2019 till august 2020, isn’t considered. Is that correct?
From India, Bengaluru
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Your service particulars are -
For the 1st spell you missed the gratuity by about 18 days.
But for the 2nd spell – Served from 16.12.2013 to 3.4.2019
ML from 4.4.2019 to 16.6.2019 (4.7.2020) 12 weeks of entitlement upto only 16.6.2019 (extended from 17.6.19 to 4.7.20; 24.3.20 to April 20 Covid pandemic lockdown but not stated whether salary was paid or not.)
On extended leave (LWP) = from 17.6.2019 to 4.7.2020 (not reported/not worked)
Unclassified absence/leave = 5.7.20 to 25.8.2020
Relieved on 25.8.2020
It's understood that your office grant leave upto 4.7.20 which means period from 4.7.20 till your relieving date 25.8.20 has been treated 'leave of absence' not entitled to salary or unpaid leave. In effect your service has been closed on 3.7.20 itself that's why gratuity has been considered upto 4.7.20 only. You have not indicated whether you got the salary from 4.4.2019 onwards said to be on permitted leave. Having completed full 5 yrs you are eligible but to become eligible for the 6th year service you are short of stipulated 6 months.
Can you check whether your relieving letter is dated 25.8.20 or stated as 'relieved on 25.8.20'. In any case it appears your service has been discontinued on 4.7.20.
From India, Bangalore
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For the 1st spell you missed the gratuity by about 18 days.
But for the 2nd spell – Served from 16.12.2013 to 3.4.2019
ML from 4.4.2019 to 16.6.2019 (4.7.2020) 12 weeks of entitlement upto only 16.6.2019 (extended from 17.6.19 to 4.7.20; 24.3.20 to April 20 Covid pandemic lockdown but not stated whether salary was paid or not.)
On extended leave (LWP) = from 17.6.2019 to 4.7.2020 (not reported/not worked)
Unclassified absence/leave = 5.7.20 to 25.8.2020
Relieved on 25.8.2020
It's understood that your office grant leave upto 4.7.20 which means period from 4.7.20 till your relieving date 25.8.20 has been treated 'leave of absence' not entitled to salary or unpaid leave. In effect your service has been closed on 3.7.20 itself that's why gratuity has been considered upto 4.7.20 only. You have not indicated whether you got the salary from 4.4.2019 onwards said to be on permitted leave. Having completed full 5 yrs you are eligible but to become eligible for the 6th year service you are short of stipulated 6 months.
Can you check whether your relieving letter is dated 25.8.20 or stated as 'relieved on 25.8.20'. In any case it appears your service has been discontinued on 4.7.20.
From India, Bangalore
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The company paid me only till my entitled ML. From 04/07/2019, till the date I was relieved, I haven’t received any salary. It was LWP.
My HR said, my gratuity will be calculated only till 04/07/2019. Not till 2020. Please clarify if I am entitled till 2020 or only till 04/07/2019?
Thanks again for the help.
From India, Bengaluru
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My HR said, my gratuity will be calculated only till 04/07/2019. Not till 2020. Please clarify if I am entitled till 2020 or only till 04/07/2019?
Thanks again for the help.
From India, Bengaluru
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The company has relieved you only on 25.08.2020. That means your continuous service is till that date, although you have been paid only till 04.07.2019. The definition of continuous service includes a period of absence as long as it is uninterrupted service. So you are entitled to gratuity till 25.08.20. Accordingly, you are entitled to seven years of gratuity.
From India, Mumbai
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From India, Mumbai
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Thank you for clarifying that for me!
Now, if I may, please ask for some more help here. May I ask you to help me with the information on which codes or rules to mention specifically to support my stand about the 7 years gratuity?
Thanks again for all your time and help; I appreciate it.
From India, Bengaluru
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Now, if I may, please ask for some more help here. May I ask you to help me with the information on which codes or rules to mention specifically to support my stand about the 7 years gratuity?
Thanks again for all your time and help; I appreciate it.
From India, Bengaluru
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No gratuity payment for initial years of service: New Labour Law Code Rules-
New Labour Law Code – The Code on Social Security, 2019, the effective date is yet to be notified by the Govt. though this Code itself has been notified after formal approval by the President of India on 28.9.20. It's speculated that it can happened in Dec.20.
It was agreed on part of easing compliance for business, to subsume the nine major labor laws which include as follows:
1.The Employee provident fund Act, 1952;
2.Social Security Act, 2008; 3.Maternity Benefit Act,1961;
4.Employee State Insurance Act,1948;
5.Employee Compensation Act, 1923;
6.Cine workers welfare fund Act,1981;
7.Unorganized Worker’s Social Security Act,2008;
8.Building and other construction workers Cess Act,1996 and
9.The Payment of Gratuity Act, 1972 under a single labor Code
Within the new Labour Law Code, with the help of concerned stakeholders and authorities, the government has notified for a provision for the reduction of the eligibility criteria for payment of gratuity and related rules which were being followed for decades.
The Code under its Chapter V – Rules for Gratuity now prescribes for a reduction in tenure for the payment gratuity to employees in some exceptional circumstances even if they had not completed their five years of service with the organization.
Here’s a quick view of the said rules for Gratuity in the Proposed Social Security Code, 2019-
Present Rules for Payment of Gratuity
The Payment of Gratuity Act 1972 says for ‘’the payment of gratuity to the employee – on termination of his employment service when the employee has rendered his service to the organization continuously for not less than 5 years and claims for gratuity in superannuation, death or disablement or on his retirement or resignation.’’
Provided further that “completion of a term of 5 years will not be necessary for claims made in case of death or disablement of the employee .’’
That's to say, the said rules state that other than in the situation of death or disablement employees would not be able to claim gratuity before completion of their five years of service.
New Guidelines under Proposed Code of Social Security for Payment of Gratuity -
The Code on Social Security, 2019 under its Chapter V–Gratuity says for ‘’the payment of gratuity to the employee on termination of his employment service when the employee has rendered his service to the organization for not less than 5 years and claims for gratuity can be done : On his superannuation, On his retirement or resignation or
On his death or disablement due to some accident or disease or
On termination of his contract period under fixed-term employment or ; On the happening of any such event as may be notified by the Central Government.
Provided that completion of the said period of service shall not be required in case of termination of employment of employee due to death or disablement or expiration of fixed employment or on happening of any such event as may be notified by the Central Government.
In otherwords, the above rules no condition for completion of 5 years service period has been placed for the employees for claiming their gratuity amount on death and disablement and on termination of the contract period and on any specific event as may be notified by the Central Government timely.
The calculation for Payment of Gratuity
The proposed Code on Social Security, 2019 shall be equally applicable like all other labour laws and codes on all employees including the white-collar and industry employees.
As per the Code, calculation of the gratuity amount shall be done in a similar manner as it was indicated in the past law. Gratuity will be paid at the rate of 15 days wages for every completed year of service or part thereof in excess of six months or for such a number of days as may be notified by the Central government based on the rate of wages last drawn by the employee concerned.
For employees receiving monthly wages or salaries, 15-day wages will be calculated using the following formula:
“15 days wages: Last salary drawn/26 x15.”
Note: The Code rules prescribed for gratuity shall not be applicable to Central or State government employees or on employees governed by any other act which prescribes different rules for payment of gratuity.
We have to await the notification for "from when the Labour Codes" would come to effect.
From India, Bangalore
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New Labour Law Code – The Code on Social Security, 2019, the effective date is yet to be notified by the Govt. though this Code itself has been notified after formal approval by the President of India on 28.9.20. It's speculated that it can happened in Dec.20.
It was agreed on part of easing compliance for business, to subsume the nine major labor laws which include as follows:
1.The Employee provident fund Act, 1952;
2.Social Security Act, 2008; 3.Maternity Benefit Act,1961;
4.Employee State Insurance Act,1948;
5.Employee Compensation Act, 1923;
6.Cine workers welfare fund Act,1981;
7.Unorganized Worker’s Social Security Act,2008;
8.Building and other construction workers Cess Act,1996 and
9.The Payment of Gratuity Act, 1972 under a single labor Code
Within the new Labour Law Code, with the help of concerned stakeholders and authorities, the government has notified for a provision for the reduction of the eligibility criteria for payment of gratuity and related rules which were being followed for decades.
The Code under its Chapter V – Rules for Gratuity now prescribes for a reduction in tenure for the payment gratuity to employees in some exceptional circumstances even if they had not completed their five years of service with the organization.
Here’s a quick view of the said rules for Gratuity in the Proposed Social Security Code, 2019-
Present Rules for Payment of Gratuity
The Payment of Gratuity Act 1972 says for ‘’the payment of gratuity to the employee – on termination of his employment service when the employee has rendered his service to the organization continuously for not less than 5 years and claims for gratuity in superannuation, death or disablement or on his retirement or resignation.’’
Provided further that “completion of a term of 5 years will not be necessary for claims made in case of death or disablement of the employee .’’
That's to say, the said rules state that other than in the situation of death or disablement employees would not be able to claim gratuity before completion of their five years of service.
New Guidelines under Proposed Code of Social Security for Payment of Gratuity -
The Code on Social Security, 2019 under its Chapter V–Gratuity says for ‘’the payment of gratuity to the employee on termination of his employment service when the employee has rendered his service to the organization for not less than 5 years and claims for gratuity can be done : On his superannuation, On his retirement or resignation or
On his death or disablement due to some accident or disease or
On termination of his contract period under fixed-term employment or ; On the happening of any such event as may be notified by the Central Government.
Provided that completion of the said period of service shall not be required in case of termination of employment of employee due to death or disablement or expiration of fixed employment or on happening of any such event as may be notified by the Central Government.
In otherwords, the above rules no condition for completion of 5 years service period has been placed for the employees for claiming their gratuity amount on death and disablement and on termination of the contract period and on any specific event as may be notified by the Central Government timely.
The calculation for Payment of Gratuity
The proposed Code on Social Security, 2019 shall be equally applicable like all other labour laws and codes on all employees including the white-collar and industry employees.
As per the Code, calculation of the gratuity amount shall be done in a similar manner as it was indicated in the past law. Gratuity will be paid at the rate of 15 days wages for every completed year of service or part thereof in excess of six months or for such a number of days as may be notified by the Central government based on the rate of wages last drawn by the employee concerned.
For employees receiving monthly wages or salaries, 15-day wages will be calculated using the following formula:
“15 days wages: Last salary drawn/26 x15.”
Note: The Code rules prescribed for gratuity shall not be applicable to Central or State government employees or on employees governed by any other act which prescribes different rules for payment of gratuity.
We have to await the notification for "from when the Labour Codes" would come to effect.
From India, Bangalore
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Ok... now, since the date from which it is effective isn’t told yet, and in this case, if my employer settles my gratuity, I’ll be paid for 6 years?
And at a later date when the Effective date is declared, will they have to reprocess and pay the difference?
From India, Bengaluru
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And at a later date when the Effective date is declared, will they have to reprocess and pay the difference?
From India, Bengaluru
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Ms. Anuradha would be entitled to gratuity for her service up to the date of her resignation, irrespective of the leave being LOP or otherwise, as stated by Mr. K.K.H!R.
The Code on Social Security will have only prospective effect from its date of notification, and I hope it would not be given retrospective effect as it would give rise to thousands of claims already settled.
From India, Salem
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The Code on Social Security will have only prospective effect from its date of notification, and I hope it would not be given retrospective effect as it would give rise to thousands of claims already settled.
From India, Salem
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You can refer to Section 2(A)(1) of the Payment of Gratuity Act 1972, quoted below:
2A. Continuous service - For the purposes of this Act, an employee shall be said to be in continuous service for a period if he has, for that period, been in uninterrupted service. This includes service which may be interrupted due to 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. This applies to both uninterrupted and interrupted service, whether rendered before or after the commencement of this Act.
Since you have had uninterrupted service from 16.12.2013 to 25.08.2020, you are eligible to receive gratuity for the whole period of seven years.
From India, Mumbai
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2A. Continuous service - For the purposes of this Act, an employee shall be said to be in continuous service for a period if he has, for that period, been in uninterrupted service. This includes service which may be interrupted due to 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. This applies to both uninterrupted and interrupted service, whether rendered before or after the commencement of this Act.
Since you have had uninterrupted service from 16.12.2013 to 25.08.2020, you are eligible to receive gratuity for the whole period of seven years.
From India, Mumbai
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Thank you for your time and patience! I appreciate the help. I definitely need to quote these sections since my hr is oblivious, and is telling me that I’m eligible for gratuity only till 2019...
Thanks again!
From India, Bengaluru
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Thanks again!
From India, Bengaluru
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The Laws Surrounding Maternity Leave.doc
Office Order regarding Maternity Leave for Contractual employee as per Amendment Act 2017.pdf