Hi,
There is confusion about the gratuity policy eligibility. The company says the eligibility of 4 years 240 days or more of continuous service is accepted as per "The Payment of Gratuity Act, 1972 (the Act)." When I refer to the Gratuity Act online, it says:
"Section: 2A Continuous service.
(a) for the said period of one year, if the employee during the period of twelve calendar months preceding the date with reference to which calculation is to be made, has actually worked under the employer for not less than - The Section 2(a)(i) -----190 days = 1 year if the company operates 5 days/week. The Section 2(a)(ii)-------240 days = 1 year in any other case (if the company operates 6 days/week)."
Is the above information correct? Do we have such section 2A mentioning 4 years and 190 days for a company operated 5 days per week?
If yes, please guide me on how to convey this to the HR and company. I am in an IT company.
From India, Pudukkottai
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There is confusion about the gratuity policy eligibility. The company says the eligibility of 4 years 240 days or more of continuous service is accepted as per "The Payment of Gratuity Act, 1972 (the Act)." When I refer to the Gratuity Act online, it says:
"Section: 2A Continuous service.
(a) for the said period of one year, if the employee during the period of twelve calendar months preceding the date with reference to which calculation is to be made, has actually worked under the employer for not less than - The Section 2(a)(i) -----190 days = 1 year if the company operates 5 days/week. The Section 2(a)(ii)-------240 days = 1 year in any other case (if the company operates 6 days/week)."
Is the above information correct? Do we have such section 2A mentioning 4 years and 190 days for a company operated 5 days per week?
If yes, please guide me on how to convey this to the HR and company. I am in an IT company.
From India, Pudukkottai
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Very recently, I have answered this query in detail, and the poster can refer to it. What is mentioned by the poster about the minimum of 190 days of continuous service is correct when the establishment works for less than 6 days a week. It would be better if the poster writes back to the HR with the extract of the provision.
From India, Salem
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6185From India, Salem
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Hello @Umakanthan sir,
Thanks for the response. My company still states that only 5 years and 240 days are the eligibility criteria, even though my company operated 5 workdays per week.
Can you please guide me on what I should do as the next step?
Thanks!
From India, Pudukkottai
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Thanks for the response. My company still states that only 5 years and 240 days are the eligibility criteria, even though my company operated 5 workdays per week.
Can you please guide me on what I should do as the next step?
Thanks!
From India, Pudukkottai
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Dear friend,
At times, a tactful HR manager's practical wisdom may direct him to play second fiddle to an impossible type of CEO. The issue at hand is a simple matter of interpretation of an unambiguously worded legal provision. Therefore, I am not inclined to underestimate the HR person's legal knowledge. His response might be dictated by the wrong policy stance of the organization.
In such a situation, the only option before you is to file a claim for gratuity with interest before the Controlling Authority under the PG Act, 1972 for the area.
The reasoned orders most likely to be passed by the C.A strictly as per the letter and spirit of the law would be an eye-opener and make the employer change his policy in this regard.
From India, Salem
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At times, a tactful HR manager's practical wisdom may direct him to play second fiddle to an impossible type of CEO. The issue at hand is a simple matter of interpretation of an unambiguously worded legal provision. Therefore, I am not inclined to underestimate the HR person's legal knowledge. His response might be dictated by the wrong policy stance of the organization.
In such a situation, the only option before you is to file a claim for gratuity with interest before the Controlling Authority under the PG Act, 1972 for the area.
The reasoned orders most likely to be passed by the C.A strictly as per the letter and spirit of the law would be an eye-opener and make the employer change his policy in this regard.
From India, Salem
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Thanks you @Umankanthan sir, Let me figure out on how to file a claim to the Controlling Authority. If you have the information already, kindly share.
From India, Pudukkottai
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From India, Pudukkottai
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As far as I remember, the days worked includes weekly off, right. It is not actual days present in the office. @Umankanthan sir, can you throw some light on this?
From India, Mumbai
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From India, Mumbai
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Dear Saswata,
You are correct per the provisions of Sec. 2-A of the PG Act, 1972 as well as Sec. 25-B of the ID Act, 1947. Both define the term 'continuous service' in a similar fashion, with the only point of difference regarding unauthorized absence not being treated as a break in service as per the service regulations in this specific regard.
In this connection, I would like to reproduce the observations of the Supreme Court in Workmen of American Express International Banking Corporation v. Management [AIR 1986 SC 458] as follows:
"The expression 'actually worked under the employer' cannot mean those days only when the workman worked with a hammer, sickle, or pen, but necessarily comprehends all those days during which he was in employment of the employer and for which he had been paid wages either under an express or implied contract of service or by compulsion of statute, standing orders, etc."
In this context, I believe that the management's contention is based on the literal meaning of the words used in the proviso. Hence, they hold the employee who is required to work for less than 6 days a week has also to complete 240 days of continuous service in the 5th year to be eligible for gratuity. The concession of 190 days of service in a year is in consonance with the consequential reduction in the total number of working days only because of less than a 6-day work schedule. The emphasis of the proviso is only on the weekly work schedule of the establishment concerning its employees, including the number of weekly holidays.
Regarding filing a claim, the poster shall engage the services of a lawyer for the entire proceedings of the Controlling Authority under the Act as a quasi-judicial one. Alternatively, he can also engage the services of a seasoned trade union office bearer.
From India, Salem
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You are correct per the provisions of Sec. 2-A of the PG Act, 1972 as well as Sec. 25-B of the ID Act, 1947. Both define the term 'continuous service' in a similar fashion, with the only point of difference regarding unauthorized absence not being treated as a break in service as per the service regulations in this specific regard.
In this connection, I would like to reproduce the observations of the Supreme Court in Workmen of American Express International Banking Corporation v. Management [AIR 1986 SC 458] as follows:
"The expression 'actually worked under the employer' cannot mean those days only when the workman worked with a hammer, sickle, or pen, but necessarily comprehends all those days during which he was in employment of the employer and for which he had been paid wages either under an express or implied contract of service or by compulsion of statute, standing orders, etc."
In this context, I believe that the management's contention is based on the literal meaning of the words used in the proviso. Hence, they hold the employee who is required to work for less than 6 days a week has also to complete 240 days of continuous service in the 5th year to be eligible for gratuity. The concession of 190 days of service in a year is in consonance with the consequential reduction in the total number of working days only because of less than a 6-day work schedule. The emphasis of the proviso is only on the weekly work schedule of the establishment concerning its employees, including the number of weekly holidays.
Regarding filing a claim, the poster shall engage the services of a lawyer for the entire proceedings of the Controlling Authority under the Act as a quasi-judicial one. Alternatively, he can also engage the services of a seasoned trade union office bearer.
From India, Salem
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URL: [https://clc.gov.in/clc/contact-list-region-wise](https://clc.gov.in/clc/contact-list-region-wise)
Dy. CLC(C), Chennai
Sh. Arun Kumar
044-28277241, 28277955
support-dyclcchn[at]nic[dot]in
I found the above contact on the Central Chief Labour Commissioner website. Should I contact and file a complaint?
From India, Pudukkottai
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Dy. CLC(C), Chennai
Sh. Arun Kumar
044-28277241, 28277955
support-dyclcchn[at]nic[dot]in
I found the above contact on the Central Chief Labour Commissioner website. Should I contact and file a complaint?
From India, Pudukkottai
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Payment of Gratuity Act, 1972 & The Rules.ppt
THE PAYMENT OF GRATUITY ACT 1972.doc