Can anyone clarify the queries regarding Gratuity as noted below:
1. Case No. 1: If an employee works in Firm A for 3 years and 4 years in Firm B, both of which are operated by the same employer, will the employee be eligible for Gratuity benefits?
2. Case No. 2: If an employee works in Firm A for 8 years and in Firm B for 6 years, both under the same employer, will the employee qualify for Gratuity benefits?
In both cases, how can an employee receive Gratuity benefits considering there is a break in service in both instances? Please advise on the appropriate course of action.
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1. Case No. 1: If an employee works in Firm A for 3 years and 4 years in Firm B, both of which are operated by the same employer, will the employee be eligible for Gratuity benefits?
2. Case No. 2: If an employee works in Firm A for 8 years and in Firm B for 6 years, both under the same employer, will the employee qualify for Gratuity benefits?
In both cases, how can an employee receive Gratuity benefits considering there is a break in service in both instances? Please advise on the appropriate course of action.
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Please amend the heading to reflect the question you are asking in your post. Thank you.
From Australia, Melbourne
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701From Australia, Melbourne
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Hi,
Case No. 1: If A and B firms are separate entities and separate appointment letters/relieving letters are issued, then the employee is not eligible for Gratuity. However, the employer, at their own discretion, can consider releasing Gratuity, taking into account the employee's Date of Joining (DOJ) with A firm as the start date and the last working day in B firm as the end date, only for the purpose of Gratuity calculation, provided there is no break in service between A and B firms.
Case No. 2: Similar to case no. 1, if A and B firms are separate entities with separate appointment letters and relieving letters issued, and if 8 and 6 years of continuous service are rendered, separate Gratuity for A and B firms can be claimed. Alternatively, the employer, at their own discretion, can consider both 8 + 6 years as one service of 14 years and release a single gratuity payment, provided there is no break.
Earlier in the start of my career, I worked with two different entities run by the same employer but received a single Gratuity payment at the time of exit based on my request. I obtained a service continuity letter for the purpose of Gratuity.
More importantly, A and B firms should come under the purview of the Gratuity Act. The Act is applicable to factories, mines, oil fields, plantations, ports, railways, motor transport undertakings, companies, and to shops and other establishments employing 10 or more workmen.
From India, Madras
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Case No. 1: If A and B firms are separate entities and separate appointment letters/relieving letters are issued, then the employee is not eligible for Gratuity. However, the employer, at their own discretion, can consider releasing Gratuity, taking into account the employee's Date of Joining (DOJ) with A firm as the start date and the last working day in B firm as the end date, only for the purpose of Gratuity calculation, provided there is no break in service between A and B firms.
Case No. 2: Similar to case no. 1, if A and B firms are separate entities with separate appointment letters and relieving letters issued, and if 8 and 6 years of continuous service are rendered, separate Gratuity for A and B firms can be claimed. Alternatively, the employer, at their own discretion, can consider both 8 + 6 years as one service of 14 years and release a single gratuity payment, provided there is no break.
Earlier in the start of my career, I worked with two different entities run by the same employer but received a single Gratuity payment at the time of exit based on my request. I obtained a service continuity letter for the purpose of Gratuity.
More importantly, A and B firms should come under the purview of the Gratuity Act. The Act is applicable to factories, mines, oil fields, plantations, ports, railways, motor transport undertakings, companies, and to shops and other establishments employing 10 or more workmen.
From India, Madras
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Less than 5 years service - Eligibility for payment of gratuity.pdf
Minimum Qualifying service for Gratuity under the Payment of Gratuity Act.docx