Dear All Seniors,
Thanks for your kind inputs & remarks
Let me please clear I am not of opinion of evading any Gratuity Liability but to understand with in depth knowledge of community members if we peruse the below definition of " Continuous Service " any interruption not due to fault of employee should be covered under definition of continuous service. So I am interpreting that Gratuity should be paid for the period at the time of retrenching employee.
Looking forward for your more kind inputs.
2A. CONTINUOUS SERVICE. -
For the purposes of this Act, – (1) an employee shall be said to be in continuous service for a period if he has, for that period, been in uninterrupted service, including service which may be interrupted on account of sickness, accident, leave, absence from duty without leave (not being absence in respect of which an order treating the absence as break in service has been passed in accordance with the standing order, 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, whether such uninterrupted or interrupted service was rendered before or after the commencement of this Act.
From India, Pune
467Thanks for your kind inputs & remarks
Let me please clear I am not of opinion of evading any Gratuity Liability but to understand with in depth knowledge of community members if we peruse the below definition of " Continuous Service " any interruption not due to fault of employee should be covered under definition of continuous service. So I am interpreting that Gratuity should be paid for the period at the time of retrenching employee.
Looking forward for your more kind inputs.
2A. CONTINUOUS SERVICE. -
For the purposes of this Act, – (1) an employee shall be said to be in continuous service for a period if he has, for that period, been in uninterrupted service, including service which may be interrupted on account of sickness, accident, leave, absence from duty without leave (not being absence in respect of which an order treating the absence as break in service has been passed in accordance with the standing order, 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, whether such uninterrupted or interrupted service was rendered before or after the commencement of this Act.
From India, Pune
Good afternoon,
This is contributed by Subir Chatterjee
Mettur Beardshell Ltd Vs. RLC. 1996 decision: In case of Retrenchment , an employee who has completed 4 years 10 months and 18 days continuously without any break is eligible for Gratuity under the Act
Please read the document attached, that he shared
From India, Mumbai
This is contributed by Subir Chatterjee
Mettur Beardshell Ltd Vs. RLC. 1996 decision: In case of Retrenchment , an employee who has completed 4 years 10 months and 18 days continuously without any break is eligible for Gratuity under the Act
Please read the document attached, that he shared
From India, Mumbai
Dear Mr Prashant,
Though I appreciated you for raising the initial query, which I termed as Brainstorming but I am sorry to point out this time that I have an objection where you have mentioned in your mail that you are trying to understand or judge the depth knowledge of community members and thrown a question for further discussions as to interruption of work not due to fault of employee should be covered under definition of 'Continuous Service' under Section 2A of the Payment of Gratuity Act.If you read the definition carefully,it is already covered.While computing 240 days,the period which is interrupted not due to fault of employee is taken into consideration.There should not be any doubt on this point. You should understand that the Payment of Gratuity Act & the Industrial Disputes Act are two separate Acts. One has to fulfill the eligibility criteria for reaping the benefits accruing from there. As such the minimum period for getting retrenchment compensation under ID Act is 240 days whereas a minimum period f of 5 years is prescribed under the Payment of Gratuity Act.If you compare the definitions of 'Continuous Service' under Section 2A of the Payment of Gratuity Act & Section 25B of the Industrial Disputes Act, both are identical.
BS Kalsi
Member since Aug 2011
From India, Mumbai
Though I appreciated you for raising the initial query, which I termed as Brainstorming but I am sorry to point out this time that I have an objection where you have mentioned in your mail that you are trying to understand or judge the depth knowledge of community members and thrown a question for further discussions as to interruption of work not due to fault of employee should be covered under definition of 'Continuous Service' under Section 2A of the Payment of Gratuity Act.If you read the definition carefully,it is already covered.While computing 240 days,the period which is interrupted not due to fault of employee is taken into consideration.There should not be any doubt on this point. You should understand that the Payment of Gratuity Act & the Industrial Disputes Act are two separate Acts. One has to fulfill the eligibility criteria for reaping the benefits accruing from there. As such the minimum period for getting retrenchment compensation under ID Act is 240 days whereas a minimum period f of 5 years is prescribed under the Payment of Gratuity Act.If you compare the definitions of 'Continuous Service' under Section 2A of the Payment of Gratuity Act & Section 25B of the Industrial Disputes Act, both are identical.
BS Kalsi
Member since Aug 2011
From India, Mumbai
Dear All,
Everyone knows that after completion of 5 years an employee is eligible for Payment of Gratuity.
But it is also mentioned in the act that if a person complete his 4 years and 6 month service in a continuous manner, he also eligible for the same.
From India, Jharsuguda
Everyone knows that after completion of 5 years an employee is eligible for Payment of Gratuity.
But it is also mentioned in the act that if a person complete his 4 years and 6 month service in a continuous manner, he also eligible for the same.
From India, Jharsuguda
Dear Seniors,
I agree, there is a thumb rule as mentioned by Nipuna & agreed by others.
But, another question is, now a days, many Companies considers gratuity as part of CTC, & when an employee resigns before completion of 5 years, Company do not pay or refund the money deducted towards gratuity. In such cases, what is the Legal stand ?
Could you all please highlight this point ?
Thanks & Regards,
Sampat Tidke
From United States, Fairfield
I agree, there is a thumb rule as mentioned by Nipuna & agreed by others.
But, another question is, now a days, many Companies considers gratuity as part of CTC, & when an employee resigns before completion of 5 years, Company do not pay or refund the money deducted towards gratuity. In such cases, what is the Legal stand ?
Could you all please highlight this point ?
Thanks & Regards,
Sampat Tidke
From United States, Fairfield
Dear Sampath,
GrATUITY is a terminal benefit payable by the employer. So, there is no harm nor it is wrong to be included in the CTC. For the sake of financial and administrative convenience, periodical payment to gratuity schemes instituted by insurance companies are adopted. NO CONTRIBUTION IN THIS REGARD BY THE EMPLOYEE. Completion of five years of continuous service under the same employer is the criterion set by the law as the basic norm for eligibility for gratuity.Because of a judgment of a particular High Court, that too in a different context of continuity of employment of the employee under the same employer beyond five years, many people think that the definition of continuous service alone should be taken into account and not the five years literally. It is also correct in one way i.e., we have to accept the judgment of the high court when it is not controverted by another highcourt or Supreme Court.So, in case of refusal of settlement of gratuity through the outside insuring agency, please verify the contract between the employer and the insurer.
From India, Salem
GrATUITY is a terminal benefit payable by the employer. So, there is no harm nor it is wrong to be included in the CTC. For the sake of financial and administrative convenience, periodical payment to gratuity schemes instituted by insurance companies are adopted. NO CONTRIBUTION IN THIS REGARD BY THE EMPLOYEE. Completion of five years of continuous service under the same employer is the criterion set by the law as the basic norm for eligibility for gratuity.Because of a judgment of a particular High Court, that too in a different context of continuity of employment of the employee under the same employer beyond five years, many people think that the definition of continuous service alone should be taken into account and not the five years literally. It is also correct in one way i.e., we have to accept the judgment of the high court when it is not controverted by another highcourt or Supreme Court.So, in case of refusal of settlement of gratuity through the outside insuring agency, please verify the contract between the employer and the insurer.
From India, Salem
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Surendra_Kumar_ Verma_Etc_vs_Th e_Central_Gover nment_on_23_Sep tember_1980 Gratuity payable 4 years.pdf
Gratuity on Retrenchment in closure of unit-SC judgment.docx