Any employee working for 5 years or more is eligible for Gratuity. For the computation of years of service, the following will be taken into consideration:
1) Working for 6 months or more in a year shall be considered and computed as 1 year.
2) The date of joining the employment and the date of the last working day should be considered.
The said employee has already worked for more than six months (186 & 170 days) in a year, and hence, his service for this period will also be counted as 1 year.
Regards,
Nikesh Doure
From India, Pune
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21) Working for 6 months or more in a year shall be considered and computed as 1 year.
2) The date of joining the employment and the date of the last working day should be considered.
The said employee has already worked for more than six months (186 & 170 days) in a year, and hence, his service for this period will also be counted as 1 year.
Regards,
Nikesh Doure
From India, Pune
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An employee is eligible for gratuity only if he had worked (paid) for 240 days in a year. For the purpose of calculation of the year, the period from the date of leaving and the date of joining (including probation) is considered unless there is a break in service. Five years of such service are required for the consideration of eligibility for gratuity. Only after attaining the minimum eligibility criteria, rounding off of service for 6 months and above is considered.
However, it has been decided to pay an amount as gratuity in consideration of the service rendered by him, which is a good thing. But it is not statutorily binding on you to take it as a precedence.
Sivarajan
From India, Thiruvananthapuram
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However, it has been decided to pay an amount as gratuity in consideration of the service rendered by him, which is a good thing. But it is not statutorily binding on you to take it as a precedence.
Sivarajan
From India, Thiruvananthapuram
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Mr. Tarun Gupta,
The employee is entitled to ten years of service in view of the amendment to continuous service. The employee, as long as he is in service and there is no order passed to treat it as a break in service, will be entitled to gratuity even if he does not work for a single day in a year. This is in view of the amendment to continuous service in the definition in the Payment of Gratuity Act.
P M Patel
From India, Mumbai
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The employee is entitled to ten years of service in view of the amendment to continuous service. The employee, as long as he is in service and there is no order passed to treat it as a break in service, will be entitled to gratuity even if he does not work for a single day in a year. This is in view of the amendment to continuous service in the definition in the Payment of Gratuity Act.
P M Patel
From India, Mumbai
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Dear All,
As I understand, after attaining the eligibility criteria of 5 years, gratuity shall be calculated for the entire period from DOJ to DOL. The rounding off criteria of 6 months shall be applicable for the last year, i.e., the leaving year only. For example, if an employee has left in 2012 and worked for more than 6 months, they shall be eligible for gratuity for 2012 as well. If the employee has not worked for 240 days in between, they shall not be eligible for leave, and disciplinary action could be taken for absenteeism accordingly.
In your case, the employee shall be eligible for 10 years as last year he has worked for more than 6 months.
Additionally, gratuity is a form of social security, and after eligibility, it's at the employer's discretion. The employer can pay even more than the actual calculation as a loyalty bonus or long association reward.
If there are any errors, please correct.
Kishore
From India, Mumbai
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As I understand, after attaining the eligibility criteria of 5 years, gratuity shall be calculated for the entire period from DOJ to DOL. The rounding off criteria of 6 months shall be applicable for the last year, i.e., the leaving year only. For example, if an employee has left in 2012 and worked for more than 6 months, they shall be eligible for gratuity for 2012 as well. If the employee has not worked for 240 days in between, they shall not be eligible for leave, and disciplinary action could be taken for absenteeism accordingly.
In your case, the employee shall be eligible for 10 years as last year he has worked for more than 6 months.
Additionally, gratuity is a form of social security, and after eligibility, it's at the employer's discretion. The employer can pay even more than the actual calculation as a loyalty bonus or long association reward.
If there are any errors, please correct.
Kishore
From India, Mumbai
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Dear Tarun ji,
As per The Payment of Gratuity Act, the said employee is entitled to 10 years of gratuity. Moreover, it has nothing to do with the date of confirmation as pointed out by Sh. Malhotra 444. For eligibility for Gratuity, an employee has to work a minimum of five years. It is incorrect to say that if someone has worked for 240 days in the 5th year, they will be eligible for gratuity. It is also irrelevant if they have worked for 180-200 days in the last two years of their service. If an employee has worked for five and a half years, they will be eligible for six-year gratuity. The total period of service will be calculated from the Date of Joining to the Date of Resignation.
The formula for the payment of Gratuity is:
(Basic + DA) / 26 X Number of years of Service
(Please note that the number of years of service must be 5 years from the date of joining). Even if there is a shortfall of one day, the employee will not be eligible for Gratuity.
Regards,
Lokesh Sharma
From India, Lucknow
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As per The Payment of Gratuity Act, the said employee is entitled to 10 years of gratuity. Moreover, it has nothing to do with the date of confirmation as pointed out by Sh. Malhotra 444. For eligibility for Gratuity, an employee has to work a minimum of five years. It is incorrect to say that if someone has worked for 240 days in the 5th year, they will be eligible for gratuity. It is also irrelevant if they have worked for 180-200 days in the last two years of their service. If an employee has worked for five and a half years, they will be eligible for six-year gratuity. The total period of service will be calculated from the Date of Joining to the Date of Resignation.
The formula for the payment of Gratuity is:
(Basic + DA) / 26 X Number of years of Service
(Please note that the number of years of service must be 5 years from the date of joining). Even if there is a shortfall of one day, the employee will not be eligible for Gratuity.
Regards,
Lokesh Sharma
From India, Lucknow
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Any person who was in continuous employment for 5 or more years is eligible for gratuity for the period from the date of joining to separation. A period of six months and one day shall be considered as one year of service. Since there is no break in service in writing as per records, the individual shall be entitled to the total number of years of service, including rounding off the fractional period beyond six months.
From India, Mumbai
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From India, Mumbai
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Dear Mr. Gupta,
First, eligibility for gratuity is based on working for 5 years without any disqualification. The calculation of gratuity is done according to the calendar year. For example, if the date of joining (DOJ) is 1-9-2001 and the date of leaving (DOL) is 5-6-2008, then the calendar years would be from 1-1-2002 to 31-12-2007, totaling 6 years. Additionally, adding the 4 months from 1-9-2001 to 1-1-2002 and the 6 months from 1-1-2008 to 5-6-2008, the total days worked amount to 240, which equals one year. Consequently, the individual would be eligible for gratuity for 6+1 = 7 years provided they have worked for 240 days each year.
It's important to note that if an individual works less than 240 days in a year, they will not be eligible for gratuity for that year. In cases where the individual works less than 240 days in two years, they would lose the gratuity for those years. It's crucial to understand that the years referred to are calendar years, not financial years or years based on the date of joining. This method of gratuity payment is accepted, agreed upon, and ensures a fair way of calculating gratuity.
Best regards,
Vibhakar Ramtirthkar
SVR Associates
HR Consultant
From India, Pune
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First, eligibility for gratuity is based on working for 5 years without any disqualification. The calculation of gratuity is done according to the calendar year. For example, if the date of joining (DOJ) is 1-9-2001 and the date of leaving (DOL) is 5-6-2008, then the calendar years would be from 1-1-2002 to 31-12-2007, totaling 6 years. Additionally, adding the 4 months from 1-9-2001 to 1-1-2002 and the 6 months from 1-1-2008 to 5-6-2008, the total days worked amount to 240, which equals one year. Consequently, the individual would be eligible for gratuity for 6+1 = 7 years provided they have worked for 240 days each year.
It's important to note that if an individual works less than 240 days in a year, they will not be eligible for gratuity for that year. In cases where the individual works less than 240 days in two years, they would lose the gratuity for those years. It's crucial to understand that the years referred to are calendar years, not financial years or years based on the date of joining. This method of gratuity payment is accepted, agreed upon, and ensures a fair way of calculating gratuity.
Best regards,
Vibhakar Ramtirthkar
SVR Associates
HR Consultant
From India, Pune
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A completed year of service means he should have 240 working days in a year. Hence, he will be eligible for gratuity for a period of 8 years only. Please see Sec 2 A as given hereunder.
Regards,
R.R. Jaju
Payment of Gratuity Act, 1972
Section 2A
2A. Continuous service. "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 a break in service has been passed in accordance with the standing orders, 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; (2) where an employee (not being an employee employed in a seasonal establishment) is not in continuous service within the meaning of clause (1), for any period of one year or six months, he shall be deemed to be in continuous service under the employer-- (a) for the said period of one year, if the employee during the period of twelve calendar months preceding the date with reference to which calculation is to be made, has actually worked under the employer for not less than-- (i) 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 (ii) two hundred and forty days, in any other case; (b) for the said period of six months, if the employee during the period of six calendar months preceding the date with reference to which the calculation is to be made, has actually worked under the employer for not less than-- (i) 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 (ii) one hundred and twenty days, in any other case; Explanation.--For the purposes of clause (2), the number of days on which an employee has actually worked under an employer shall include the days on which-- (i) he has been laid-off under an agreement or as permitted by standing orders made under the Industrial Employment (Standing Orders) Act, 1946 (20 of 1946), or under the Industrial Disputes Act, 1947 or (14 of 1947), under any other law applicable to the establishment; (ii) he has been on leave with full wages, earned in the previous year; (iii) he has been absent due to temporary disablement caused by accident arising out of and in the course of his employment; and (iv) 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. (3) where an employee, employed in a seasonal establishment, is not in continuous service within the meaning of clause (1), for any period of one year or six months, he shall be deemed to be in continuous service under the employer for such period 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.]
From India, Mumbai
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Regards,
R.R. Jaju
Payment of Gratuity Act, 1972
Section 2A
2A. Continuous service. "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 a break in service has been passed in accordance with the standing orders, 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; (2) where an employee (not being an employee employed in a seasonal establishment) is not in continuous service within the meaning of clause (1), for any period of one year or six months, he shall be deemed to be in continuous service under the employer-- (a) for the said period of one year, if the employee during the period of twelve calendar months preceding the date with reference to which calculation is to be made, has actually worked under the employer for not less than-- (i) 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 (ii) two hundred and forty days, in any other case; (b) for the said period of six months, if the employee during the period of six calendar months preceding the date with reference to which the calculation is to be made, has actually worked under the employer for not less than-- (i) 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 (ii) one hundred and twenty days, in any other case; Explanation.--For the purposes of clause (2), the number of days on which an employee has actually worked under an employer shall include the days on which-- (i) he has been laid-off under an agreement or as permitted by standing orders made under the Industrial Employment (Standing Orders) Act, 1946 (20 of 1946), or under the Industrial Disputes Act, 1947 or (14 of 1947), under any other law applicable to the establishment; (ii) he has been on leave with full wages, earned in the previous year; (iii) he has been absent due to temporary disablement caused by accident arising out of and in the course of his employment; and (iv) 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. (3) where an employee, employed in a seasonal establishment, is not in continuous service within the meaning of clause (1), for any period of one year or six months, he shall be deemed to be in continuous service under the employer for such period 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.]
From India, Mumbai
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Dear Mr. Gupta,
Your information is incomplete insofar as the provisions of the Payment of Gratuity Act are concerned. The question is not for how much period you have paid salary to the employee, rather the question is of continuous service, which includes service that may be interrupted on account of sickness, accident, leave, absence from duty without leave (not being an absence in respect of which an order treating the absence as a 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.
So, unless you have already formally treated his absence as a break in service in accordance with the standing order, rules, or regulations governing the employees of the establishment, you can't treat his service to be non-continuous service. In the absence of any such order, his service would be treated as uninterrupted service for the purpose of payment of gratuity.
From India, Delhi
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Your information is incomplete insofar as the provisions of the Payment of Gratuity Act are concerned. The question is not for how much period you have paid salary to the employee, rather the question is of continuous service, which includes service that may be interrupted on account of sickness, accident, leave, absence from duty without leave (not being an absence in respect of which an order treating the absence as a 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.
So, unless you have already formally treated his absence as a break in service in accordance with the standing order, rules, or regulations governing the employees of the establishment, you can't treat his service to be non-continuous service. In the absence of any such order, his service would be treated as uninterrupted service for the purpose of payment of gratuity.
From India, Delhi
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Please note that the qualification for 240 days of work is a must to be eligible for gratuity every year after completing 5 years of service, as per the Gratuity Act. The employer is willing to pay regardless of the number of days worked, but it should follow a uniform policy. There should not be any deviation.
D. Gurumurthy
HR & IR Consultant
From India, Hyderabad
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D. Gurumurthy
HR & IR Consultant
From India, Hyderabad
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