Hi
There are 2 different theories which I came across pertaining to deciding the elegibility of gratuity payment.
A. 4 yrs and 240 days of 5th year
b. 4 years and 6 months (as every 6 months will be considered as part of next year, meaning 4.6 becomes 5)
whereas the payment of gratuity act state the elegibility as 5 years of continuour service. I request if you can get me sufficient clarity and support with any caselaw/ judgement passed so far.
Regards,
Satya
From India, Bangalore
There are 2 different theories which I came across pertaining to deciding the elegibility of gratuity payment.
A. 4 yrs and 240 days of 5th year
b. 4 years and 6 months (as every 6 months will be considered as part of next year, meaning 4.6 becomes 5)
whereas the payment of gratuity act state the elegibility as 5 years of continuour service. I request if you can get me sufficient clarity and support with any caselaw/ judgement passed so far.
Regards,
Satya
From India, Bangalore
A fraction of year over Six months is considered as one year for the purpose of calculating amount of gratuity but not for deciding whether the employee is eligible for gratuity or not. Therefore, if an employee leaves after completing 6 years and 7 months (or even 6 months and one day) then he will get gratuity for seven years rounding off the 7 months as one year. However, for deciding eligibility fraction of a year over six months is not counted and it is purely on the basis of completed year of service.
Though the Payment of Gratuity Act strictly speaks that five years from the date of joining is mandatory to make an employee eligible for gratuity, following Madras High Court verdict in Beardsell's case, an employee who has completed four years and 240 days in the fifth year is eligible for gratuity. However, the same being a HC verdict, it need not be accepted by other states. Still some states have followed it.
Regards,
Madhu.T.K
From India, Kannur
4250Though the Payment of Gratuity Act strictly speaks that five years from the date of joining is mandatory to make an employee eligible for gratuity, following Madras High Court verdict in Beardsell's case, an employee who has completed four years and 240 days in the fifth year is eligible for gratuity. However, the same being a HC verdict, it need not be accepted by other states. Still some states have followed it.
Regards,
Madhu.T.K
From India, Kannur
As Madhu has cleare this issue i would like one line. if an employee has completed 240 days in a year, it is condiser as a full year. According to law if an employee has completed 240 days he will be condiser in continuous service for the complet year.
From India, Delhi
From India, Delhi
I understand that if any of the HC has given the verdit it is applicable for all the states till some other HC gives against it. If the latter gives such verdit it is appliacable only to that state only and for other states the former verdit will follow till H'b Suprem Court's verdict comes.
regards
YK
From India, Mumbai
regards
YK
From India, Mumbai
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 Act-Teachers-Ma dhya Pradesh.docx
Payment of Gratuity Act, 1972 & The Rules.ppt