1. Majority of the Companies follow the law on gratuity for payment of gratuity to its employees.
2. Companies which have made rules for payment of gratuity to employees only if they have completed 10 years service with them, are in violation of the law on gratuity.
3. In the current case, it is quite clear that the company follows the Payment of Gratuity Act in accordance with which the employee is not eligible for payment of gratuity. Hence, in all probability this would be the reply of the HR department if they are approached.
Thanks.
G. Hari
From India, Alappuzha
72. Companies which have made rules for payment of gratuity to employees only if they have completed 10 years service with them, are in violation of the law on gratuity.
3. In the current case, it is quite clear that the company follows the Payment of Gratuity Act in accordance with which the employee is not eligible for payment of gratuity. Hence, in all probability this would be the reply of the HR department if they are approached.
Thanks.
G. Hari
From India, Alappuzha
1. As per the provisions of the Payment of Gratuity Act, Gratuity can be forfeited in the following cases:
a. Employee whose services has been terminated for any act, willful omission or negligence causing any damage or loss to, or destruction of property belonging to the employer – gratuity to be forfeited to the extent of such damage or loss caused.
b. Employee whose services has been terminated for riotous or disorderly conduct or any other act of violence on his part – gratuity to be forfeited wholly or partially.
c. Employee whose services has been terminated for any act which constitutes an offence involving moral turpitude committed by him during the course of his employment – gratuity to be forfeited wholly or partially.
2. The employee is entitled to full or partial gratuity based on the reasons for his termination, as per law.
3. For being eligible, the terminated employee should have completed 5 years of service (namely, in the fifth year of service he should have worked for at least 240 days). In other words, in the last 10 months he should have worked for at least 240 days.
4. Regarding his request of an Experience letter, the same can be given but the real reasons for separation should also be specified therein.
Thanks.
G. Hari
From India, Alappuzha
a. Employee whose services has been terminated for any act, willful omission or negligence causing any damage or loss to, or destruction of property belonging to the employer – gratuity to be forfeited to the extent of such damage or loss caused.
b. Employee whose services has been terminated for riotous or disorderly conduct or any other act of violence on his part – gratuity to be forfeited wholly or partially.
c. Employee whose services has been terminated for any act which constitutes an offence involving moral turpitude committed by him during the course of his employment – gratuity to be forfeited wholly or partially.
2. The employee is entitled to full or partial gratuity based on the reasons for his termination, as per law.
3. For being eligible, the terminated employee should have completed 5 years of service (namely, in the fifth year of service he should have worked for at least 240 days). In other words, in the last 10 months he should have worked for at least 240 days.
4. Regarding his request of an Experience letter, the same can be given but the real reasons for separation should also be specified therein.
Thanks.
G. Hari
From India, Alappuzha
The Gratuity Act clearly mentions that Gratuity is payable to an employee who completed 5 years of service (exemption being in the case of an employee who expires before completion of 5 years of service). As far as I can understand from the spirit of the Act, an employee should complete a period of 5 years from the date of joining to the date of cessation of service. This period of 5 completed years has to be maintained compulsorily. The point of 240 days is applicable only when the employee has taken 'leave without pay' or was not working for any period during any year during the course of service. If an employee joined service on 1st January, 2010 and resigns on 31st Dec., 2014, he has completed 5 years of service provided he has worked for a minimum of 240 days during each of these 5 years from 2010 to 2014. If he resigns on any day before 31st Dec., 2014, he has not completed 5 years of continuous service even if he has worked more than 240 days during each year. This I believe should be the correct interpretation. If the Lawmakers wanted to make gratuity payment to employees who complete 4 years and 240 days, they would not have mentioned '5 completed years of service'. This is my interpretation, though I believe the Madras High Court has given some other judgment, which does not seem to follow the spirit of the Act. I am open to correction.
From India, Kolkata
From India, Kolkata
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Less than 5 years service - Eligibility for payment of gratuity.pdf