Dear Pratik,
As already told to you by Mr. Dhingra you are eligible for gratuity. It is true that one need to complete 5 years of continuous service to be eligible for gratuity. However if we see the definition of a continuous service it says that 1 continuous year comprises of 240 days of service. So when you completed 4 years and 11 months you passed the eligibility.
This ratio is given in the Madras High Court Judgment of Mettur Beardsell Ltd. Vs. Regional Labour Commissioner. wherein Justice S. M. Abdul Wahab settled that one who completes 4 years and 240 days is eligible for gratuity.
Now coming to the query of Mr Sougat Das, even if a company works for 22 days a month the gratuity shall be calculated by dividing it by 26. The formula is given below
Gratuity Calculation= [ (Basic Pay + D.A) x 15 days x No. of years of service ] / 26
Where, D.A = Dearness Allowance.
lets see an example
Gratuity Calculation
Calculate gratuity amount, given Basic Pay = 17500, DA = 1500 and Years of Service = 25
Solution :
Gratuity = ( ( 17500 + 1500 ) * 15 * 25 ) / 26
= ( 19000 * 375 ) / 26
= 7125000 / 26
= 274038.461
Therefore, gratuity amount is 2,74,038.461
and if you divide the same by 22 the amount of gratuity shall be
=7125000 / 22 = 3,23,863.64
Wish is all yours i will not stop you from paying at higher rate and neither do Gratuity Act. Under Section 4 Sub Section 5 it is given that and i quote "Nothing in this section shall affect the right of an employee to receive better terms of gratuity under any award or agreement or contract with the employer.".
So if you want to give more you are most welcome. However mind it, if you tried to pay Gratuity on higher side that shall become customary and you will have to pay the same in the same fashion to others too. Hope that clears your Doubts. Feel free to revert if any further query.
From India, New Delhi
314As already told to you by Mr. Dhingra you are eligible for gratuity. It is true that one need to complete 5 years of continuous service to be eligible for gratuity. However if we see the definition of a continuous service it says that 1 continuous year comprises of 240 days of service. So when you completed 4 years and 11 months you passed the eligibility.
This ratio is given in the Madras High Court Judgment of Mettur Beardsell Ltd. Vs. Regional Labour Commissioner. wherein Justice S. M. Abdul Wahab settled that one who completes 4 years and 240 days is eligible for gratuity.
Now coming to the query of Mr Sougat Das, even if a company works for 22 days a month the gratuity shall be calculated by dividing it by 26. The formula is given below
Gratuity Calculation= [ (Basic Pay + D.A) x 15 days x No. of years of service ] / 26
Where, D.A = Dearness Allowance.
lets see an example
Gratuity Calculation
Calculate gratuity amount, given Basic Pay = 17500, DA = 1500 and Years of Service = 25
Solution :
Gratuity = ( ( 17500 + 1500 ) * 15 * 25 ) / 26
= ( 19000 * 375 ) / 26
= 7125000 / 26
= 274038.461
Therefore, gratuity amount is 2,74,038.461
and if you divide the same by 22 the amount of gratuity shall be
=7125000 / 22 = 3,23,863.64
Wish is all yours i will not stop you from paying at higher rate and neither do Gratuity Act. Under Section 4 Sub Section 5 it is given that and i quote "Nothing in this section shall affect the right of an employee to receive better terms of gratuity under any award or agreement or contract with the employer.".
So if you want to give more you are most welcome. However mind it, if you tried to pay Gratuity on higher side that shall become customary and you will have to pay the same in the same fashion to others too. Hope that clears your Doubts. Feel free to revert if any further query.
From India, New Delhi
Dear Members,
According to some of the learned members, Gratuity is not payable on 4 years & 11 months service but according to some learned members including Advocate Mr. Kamal Kant Tyagi and very senior member, Expert & Legal Analyst Mr. P S Dhingra, Gratuity is payable on 4 years & 11 months service.
By way of appreciating the responses in this thread, only one learned member kumaracme voted in favour of gratuity is not payable on 4 years & 11 months service but 4 learned members voted in favour of gratuity is payable on 4 years & 11 months service.
I am confused. What is the correct answer?
This forum has discussed this topic many occasions with different views altogether. There is no conclusive answer to this query. Given below is a link of one of the threads on similar topic. I request the learned members including Advocate Mr. Kamal Kant Tyagi and very senior member, Expert & Legal Analyst Mr. P S Dhingra to make comments once again in light of the below given link.
https://www.citehr.com/108564-sc-jud...-download.html
In present thread the initiator of the thread is from Mumbai, seems to be from his profile.
From India, Mumbai
According to some of the learned members, Gratuity is not payable on 4 years & 11 months service but according to some learned members including Advocate Mr. Kamal Kant Tyagi and very senior member, Expert & Legal Analyst Mr. P S Dhingra, Gratuity is payable on 4 years & 11 months service.
By way of appreciating the responses in this thread, only one learned member kumaracme voted in favour of gratuity is not payable on 4 years & 11 months service but 4 learned members voted in favour of gratuity is payable on 4 years & 11 months service.
I am confused. What is the correct answer?
This forum has discussed this topic many occasions with different views altogether. There is no conclusive answer to this query. Given below is a link of one of the threads on similar topic. I request the learned members including Advocate Mr. Kamal Kant Tyagi and very senior member, Expert & Legal Analyst Mr. P S Dhingra to make comments once again in light of the below given link.
https://www.citehr.com/108564-sc-jud...-download.html
In present thread the initiator of the thread is from Mumbai, seems to be from his profile.
From India, Mumbai
Key words for eligibility of gratuity
At least 5 years service- Continuous
Continuous service means:
An employee shall be said to be in continuous service for a period if he has, for that period, been in uninterrupted service and includes service which may be interrupted on account of sickness, accident, leave, absence from duty without leave, 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.
Where an employee is not in continuous service for any period of one year or six months, he shall be deemed to be in continuous service under the employer:
if for the said period of one year he has worked for one hundred and ninety days in the case of an employee employed below the ground in a mine or in an establishment which works for less than six days in a week and two hundred and forty days in any other case;
if for the said period of six months has actually worked under the employer for not less than ninety-five days in the case of an employee employed below the ground in a mine or in an establishment which works for less than six days in a week and one hundred and twenty days, in any other case;
The number of days on which an employee has actually worked under an employer shall include the days on which:
he has been laid-off under an agreement or as permitted by standing orders made under the Industrial Employment (Standing Orders) Act, 1946 or under the Industrial Disputes Act, 1947 or under any other law applicab1c to the establishment;
he has been on leave with full wages earned in the previous year;
he has been absent due to temporary disablement caused by accident arising out of and in the course of his employment and
in the case of a female, she has been on maternity leave; so, however, that the total period of such maternity leave does not exceed twelve weeks.
In case of employees in seasonal establishments he shall be deemed to be in continuous service for any period of one year or six months if he has actually worked for not less than seventy-five per cent of the number of days on which the establishment was in operation during such period.
In my interpretation, person has to complete five full years of service out of which if he worked 240 days in last year he should be entitled for gratuity.
From India, Pune
At least 5 years service- Continuous
Continuous service means:
An employee shall be said to be in continuous service for a period if he has, for that period, been in uninterrupted service and includes service which may be interrupted on account of sickness, accident, leave, absence from duty without leave, 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.
Where an employee is not in continuous service for any period of one year or six months, he shall be deemed to be in continuous service under the employer:
if for the said period of one year he has worked for one hundred and ninety days in the case of an employee employed below the ground in a mine or in an establishment which works for less than six days in a week and two hundred and forty days in any other case;
if for the said period of six months has actually worked under the employer for not less than ninety-five days in the case of an employee employed below the ground in a mine or in an establishment which works for less than six days in a week and one hundred and twenty days, in any other case;
The number of days on which an employee has actually worked under an employer shall include the days on which:
he has been laid-off under an agreement or as permitted by standing orders made under the Industrial Employment (Standing Orders) Act, 1946 or under the Industrial Disputes Act, 1947 or under any other law applicab1c to the establishment;
he has been on leave with full wages earned in the previous year;
he has been absent due to temporary disablement caused by accident arising out of and in the course of his employment and
in the case of a female, she has been on maternity leave; so, however, that the total period of such maternity leave does not exceed twelve weeks.
In case of employees in seasonal establishments he shall be deemed to be in continuous service for any period of one year or six months if he has actually worked for not less than seventy-five per cent of the number of days on which the establishment was in operation during such period.
In my interpretation, person has to complete five full years of service out of which if he worked 240 days in last year he should be entitled for gratuity.
From India, Pune
Dear Fellow Members,
I have not come across any Supreme Court Decision on the eligibility of Gratuity. Even the Controlling Authority under Payment of Gratuity Act rely / refer to the Madras High Court Judgment of Mettur Beardsell Ltd. Vs. Regional Labour Commissioner. Justice S. M. Abdul Wahab delivered a great judgment, which is totally clear and just interpretation of the provisions of the Act. When i read this Judgment for the first time, the eligibility became crystal clear to me. Four years and one continuous year in fifth year. True if one continuous year is 240 days of work than 240 days worked in 5th year must be the eligibility for Gratuity. Nobody disagreed from it hence it never went past High Courts. Mettur Beardsell Ltd. Vs. Regional Labour Commissioner is a Landmark Judgment and currently the Law of the Land. So i strongly suggest to read the judgment it will clear any doubt any body may have.
One more thing 240 days are not 240 working days it includes weekly off (whether One or Two in some companies), Paid Leaves, Holidays, Lay offs and Legal strike days for which payments are made to workmen. So legal world is unambiguously rely on this judgment and by relying on this there is nothing wrong legally. Think from your own judicious mind. Gratuity is a beneficial legislation and we will have to give it the most liberal and just interpretation when it comes to giving any benefit to workmen under this Act.
Hope this clears any doubt in the minds of worth members.
From India, New Delhi
I have not come across any Supreme Court Decision on the eligibility of Gratuity. Even the Controlling Authority under Payment of Gratuity Act rely / refer to the Madras High Court Judgment of Mettur Beardsell Ltd. Vs. Regional Labour Commissioner. Justice S. M. Abdul Wahab delivered a great judgment, which is totally clear and just interpretation of the provisions of the Act. When i read this Judgment for the first time, the eligibility became crystal clear to me. Four years and one continuous year in fifth year. True if one continuous year is 240 days of work than 240 days worked in 5th year must be the eligibility for Gratuity. Nobody disagreed from it hence it never went past High Courts. Mettur Beardsell Ltd. Vs. Regional Labour Commissioner is a Landmark Judgment and currently the Law of the Land. So i strongly suggest to read the judgment it will clear any doubt any body may have.
One more thing 240 days are not 240 working days it includes weekly off (whether One or Two in some companies), Paid Leaves, Holidays, Lay offs and Legal strike days for which payments are made to workmen. So legal world is unambiguously rely on this judgment and by relying on this there is nothing wrong legally. Think from your own judicious mind. Gratuity is a beneficial legislation and we will have to give it the most liberal and just interpretation when it comes to giving any benefit to workmen under this Act.
Hope this clears any doubt in the minds of worth members.
From India, New Delhi
Mr. Pratik i am nandi and you are eligible for gratuity you can check Madras high court judgment on 4 year 6 month completed to judgement is gratuity eligible.
From India, Kolhapur
From India, Kolhapur
so many observations made by our learnt members. But for first five years of service is a must for eligibility for gratuity. Courts has given judgement for 4 years and 11 months based on dispute raised before them. But as per act it is not so.
From India, New Delhi
From India, New Delhi
Dear Pratik you are not entitled for payment of gratuity. 240 days concept is applicable for eligibility criteria after entitlement of gratuity. suppose one employee has done 9 years of service . So he is entitle for payment of gratuity. but suppose in his attendance record it is found that he had not completed 240days in 7th year, so this 7th year will not be included if he person was taking authorised leave as mentioned in the act. So his 7th year will not be consider for continuous service and for that year he will not be entitled for payment of gratuity. But you have not completed 5 years of your service, so in that case if you have completed 240 days for last years , in that case also you will not be entitled for payment of gratuity as per act. But if your employer consider this is another case or if you did as trainee(other that apprentice) before that in this company , in that case this period will be included in your total tenure of service and if it cross 5 years you will be entitled fpr payment of gratuity.
From India, Mumbai
From India, Mumbai
i am working as Contractual basis job in Ministry since 5-6 year, can i claim for gratuity, but contractor changes after 4 years 9 months, but service continue by other contractor in same Ministry
From India, Delhi
From India, Delhi
Dear Kumar,
What do you think what courts do. Courts interpret what is given under the Act. They do not makeup something just to resolve some dispute. The interpretation given by courts are the Law of Land. Mettur Beardsell Judgment is widely accepted and relied upon by authorities. Please do not confuse the members here. If you want to say something please give some reference or strong bases for that.
From India, New Delhi
What do you think what courts do. Courts interpret what is given under the Act. They do not makeup something just to resolve some dispute. The interpretation given by courts are the Law of Land. Mettur Beardsell Judgment is widely accepted and relied upon by authorities. Please do not confuse the members here. If you want to say something please give some reference or strong bases for that.
From India, New Delhi
Dear Subhasis,
240 days concept is not something applicable after eligibility of five years. Can you share some Provision or Case Law to support what you said in your post.
Please i again request do not make frivolous comments that are not based on some concrete legal facts. Just to apprise you after five years if a person who works even 6 months that is just 180 days in an year is entitled for the gratuity for that whole year. 240 days are way ahead. Please read the Act in its entirety. This is given under section 4 sub section 2 and the same is reproduced for your information below:
(2) For every completed year of service or part thereof in excess of six months, the employer shall pay gratuity to an employee at the rate of fifteen days' wages based on the rate of wages last drawn by the employee concerned :
Please do not confuse other members. If you want to ask something just ask straight away and if you want to share something please check thoroughly if is correct what you are sharing. Half and wrong information is always dangerous.
From India, New Delhi
240 days concept is not something applicable after eligibility of five years. Can you share some Provision or Case Law to support what you said in your post.
Please i again request do not make frivolous comments that are not based on some concrete legal facts. Just to apprise you after five years if a person who works even 6 months that is just 180 days in an year is entitled for the gratuity for that whole year. 240 days are way ahead. Please read the Act in its entirety. This is given under section 4 sub section 2 and the same is reproduced for your information below:
(2) For every completed year of service or part thereof in excess of six months, the employer shall pay gratuity to an employee at the rate of fifteen days' wages based on the rate of wages last drawn by the employee concerned :
Please do not confuse other members. If you want to ask something just ask straight away and if you want to share something please check thoroughly if is correct what you are sharing. Half and wrong information is always dangerous.
From India, New Delhi
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FORM-F-NOMINATI ON OF GRATUITY.pdf
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