I worked in a factory for more than 9 years and quit for some reasons. Later on I again joined the same company after 3 year and again quit after 3 years. After one year I again joined the company and continue with the company till date. Thus I had 2 breaks in the total period of 26 years of service in the same company. My question is how many years of service shall be considered for the calculation of gratuitity.
From India, Delhi
From India, Delhi
Didn’t you get gratuity for the first spell of 9 years when you left the company? Why didn’t the company pay you gratuity then?
From India, Kannur
4231From India, Kannur
Sir, due to un-awareness on my part about the payment of gratuity at that time. Neither I claimed nor the company paid itself.
From India, Delhi
From India, Delhi
You,(an employee) need not claim gratuity. It is the responsibility of the employer to pay gratuity within 30 das of your leaving. Now, if the company has not paid it, and you were allowed to rejoin the company after 3 years, the period between the two, leaving the company after 9 years and joining back, shall be treated as break in service, and again adding the three years in the second spell as in continuous to the nine years. Again when the second spell also went without any gratuity payment, and the company allowed you to continue after a gap of one year, the same would also account for service. The question is whether the company had recorded the gaps as not in service or not. If you had resigned and the company had relieved properly, then the only obligation as far as the company is to pay you gratuity for the first service f 9 years now with interest. The present rate of gratuity is 10% pa. Since the second service contained only three years, that period of service will not give you any gratuity. Similarly, if you do not have five years in the present service since your joining again, then you will not get any gratuity for this period of service also.
It may also happen that when you left after the first set of service, the company was not covered by Payment of Gratuity Act also. Therefore, please check at that period if the company was covered by the Gratuity law. If your undertaking is a factory/ mine/ plantation the Payment of Gratuity Act would be applicable to it irrespective of the number of employees in it. But if not a factory/ mine or plantation, but was carrying out some trading kind of activities, then in order to make the Gratuity law applicable there should be at least ten employees in your company.
If it was a delay in payment of gratuity, the company can pay it now with interest. The amount of gratuity would be computed on the basis of the salary that you earned at the time of leaving the company after your first 9 years of service. At the same time, if your leaving was just a casual leaving, but the company had ignored it as it is without initiating any action for not reporting and allowed you to rejoin you without endorsing the break in service as a period without any service benefits, then the employer will find it difficult to find a way out. In such a scenario, you will be in a positive position because if you are able to establish that the gap was only technical, then your gratuity will have to be calculated on the basis of the present salary which will, obviously, be higher than the past wages, and the reckonable service would be 26 years.
Another possibility is that the employer can compute gratuity based on present salary but for a number of years of service by counting the breaks in service, say 3 years after the first period of service and one year after the second period of service, as breaks in service.
From India, Kannur
It may also happen that when you left after the first set of service, the company was not covered by Payment of Gratuity Act also. Therefore, please check at that period if the company was covered by the Gratuity law. If your undertaking is a factory/ mine/ plantation the Payment of Gratuity Act would be applicable to it irrespective of the number of employees in it. But if not a factory/ mine or plantation, but was carrying out some trading kind of activities, then in order to make the Gratuity law applicable there should be at least ten employees in your company.
If it was a delay in payment of gratuity, the company can pay it now with interest. The amount of gratuity would be computed on the basis of the salary that you earned at the time of leaving the company after your first 9 years of service. At the same time, if your leaving was just a casual leaving, but the company had ignored it as it is without initiating any action for not reporting and allowed you to rejoin you without endorsing the break in service as a period without any service benefits, then the employer will find it difficult to find a way out. In such a scenario, you will be in a positive position because if you are able to establish that the gap was only technical, then your gratuity will have to be calculated on the basis of the present salary which will, obviously, be higher than the past wages, and the reckonable service would be 26 years.
Another possibility is that the employer can compute gratuity based on present salary but for a number of years of service by counting the breaks in service, say 3 years after the first period of service and one year after the second period of service, as breaks in service.
From India, Kannur
I disagree with some of Mr. Madhu's contentions.
He has worked for 26 years, of which 14 earlier years will not count because of service break. So he will now get gratuity for 12 years.
He can not now claim gratuity for the first 9 years, because the period of limitation (3 years) will apply. If you did not claim an amount for 3 years, you are disallowed from claiming it thereafter. There is a provision for condonation of delay, but 20 years is not likely to be excused by the courts.
On the other hand, it is possible that the company management is considering gratuity for you for the full period as you have worked with them for so long. So perhaps you can just ask them what they plan to do for your gratuity.
From India, Mumbai
He has worked for 26 years, of which 14 earlier years will not count because of service break. So he will now get gratuity for 12 years.
He can not now claim gratuity for the first 9 years, because the period of limitation (3 years) will apply. If you did not claim an amount for 3 years, you are disallowed from claiming it thereafter. There is a provision for condonation of delay, but 20 years is not likely to be excused by the courts.
On the other hand, it is possible that the company management is considering gratuity for you for the full period as you have worked with them for so long. So perhaps you can just ask them what they plan to do for your gratuity.
From India, Mumbai
You are only to get gratuity for 9 years working in first phase. It is not easy to claim back the gratuity, because it is already time barred. Still you need to file a claim before the statutory authority, let us see what is happening.
The rest working period of 17 years are out of merrit because none of the case you have worked over a period of 5 years.
From India, Mumbai
The rest working period of 17 years are out of merrit because none of the case you have worked over a period of 5 years.
From India, Mumbai
Prabhat-ji His current period must be 12 years, right? He worked for 26 years, out of which 9 and 3 were before the currents session.
From India, Mumbai
From India, Mumbai
Mr Saswat,
The employee was having some issues because he left the job in an interval of 3 or 4 years of working. He rejoined the company as per his wish, what it appears as per his posting. The poster should post his case with time line so as to have a clear picture to understand and suggest suitably.
On strength of data the employee will get gratuity for the continuous service over 5 years or more, if there is no service break. People feel tired of sharing information but want to get legal solution to their matter, which is an impossible task. The employer can deny in a single line that records of those period is not existing.
From India, Mumbai
The employee was having some issues because he left the job in an interval of 3 or 4 years of working. He rejoined the company as per his wish, what it appears as per his posting. The poster should post his case with time line so as to have a clear picture to understand and suggest suitably.
On strength of data the employee will get gratuity for the continuous service over 5 years or more, if there is no service break. People feel tired of sharing information but want to get legal solution to their matter, which is an impossible task. The employer can deny in a single line that records of those period is not existing.
From India, Mumbai
In this case it is not section 7(7) of the Payment of Gratuity Act but section 7(2) will be applicable. Section 7(1) says that person who is eligible for payment of gratuity shall send a written application to the employer, within such time and in such form, as may be prescribed, for payment of such gratuity. At the same time sub section 2 of section 7 says that the employer shall, whether an application referred to in sub-section (1) has been made or not, determine the amount of gratuity and give notice in writing to the person to whom the gratuity is payable and also to the controlling authority specifying the amount of gratuity so determined. It is very clear that the employee need not claim the gratuity, and even if the employee has not claimed it, the employer has to compute the gratuity and pay it within 30 days (as provided in sub section 3 of section 7)
When an appeal is preferred under section 7(7) it should be done within 60 days. The section also provides doe further time of 60 days on genuine grounds. In The Secretary, Sree Avittom Thirunal Hospital v. State of Kerala, 2023 SCC it was observed that the legislature while enacting Section 7(7) of the Act, 1972 has specifically excluded the application of Limitation Act by providing the limitation of appeal for a period of 60 days condonable by another 60 days. Otherwise, the limitation to file an appeal under the schedule of the Limitation Act is 30 days.
What is important is that 60 days plus 60 days as mentioned in the Payment of Gratuity Act related to time for filing appeal against the order of any authority. In this case the employer has not even computed the gratuity nor has intimated the employee that he should collect the amount (by means of form L) or his claim for gratuity is rejected (by means of form M). As such he is entitled to get gratuity with interest at 10 percent per annum. Since the amount of interest cannot exceed the principal amount, for the period beyond 10 years, if calculated based on his first period of service of 9 years, he will not earn any interest but the interest will be limited to the principal amount of gratuity.
From India, Kannur
When an appeal is preferred under section 7(7) it should be done within 60 days. The section also provides doe further time of 60 days on genuine grounds. In The Secretary, Sree Avittom Thirunal Hospital v. State of Kerala, 2023 SCC it was observed that the legislature while enacting Section 7(7) of the Act, 1972 has specifically excluded the application of Limitation Act by providing the limitation of appeal for a period of 60 days condonable by another 60 days. Otherwise, the limitation to file an appeal under the schedule of the Limitation Act is 30 days.
What is important is that 60 days plus 60 days as mentioned in the Payment of Gratuity Act related to time for filing appeal against the order of any authority. In this case the employer has not even computed the gratuity nor has intimated the employee that he should collect the amount (by means of form L) or his claim for gratuity is rejected (by means of form M). As such he is entitled to get gratuity with interest at 10 percent per annum. Since the amount of interest cannot exceed the principal amount, for the period beyond 10 years, if calculated based on his first period of service of 9 years, he will not earn any interest but the interest will be limited to the principal amount of gratuity.
From India, Kannur
Hi you may kindly note that unless the fault of employer, if you are quitting a company by serving less than 5 years, you are not entitle for any Gratuity payment. Only when you serve 5 years and above continuously, you are eligible for Gratuity payment. At present, still you are in service with the company, only when you leave, then you can claim for gratuity for the current service rendred.
From India, Bengaluru
From India, Bengaluru
Community Support and Knowledge-base on business, career and organisational prospects and issues - Register and Log In to CiteHR and post your query, download formats and be part of a fostered community of professionals.
Gratuity-Contin uous Service-countin g broken period with same employer-Madras HC Judgment.docx
Minimum Wages in Maharashtra for the period January 2018 to June 2018.xls