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Dear Members,
According to some of the learned members, gratuity is not payable on 4 years and 11 months of service. However, according to other learned members, including Advocate Mr. Kamal Kant Tyagi and a very senior member, expert, and legal analyst Mr. P S Dhingra, gratuity is payable on 4 years and 11 months of service.
In response to the discussion in this thread, only one learned member, kumaracme, voted in favor of gratuity not being payable on 4 years and 11 months of service, while four learned members voted in favor of gratuity being payable on 4 years and 11 months of service.
I am confused. What is the correct answer?
This forum has discussed this topic on many occasions with different views. There is no conclusive answer to this query. Below is a link to one of the threads on a similar topic. I request the learned members, including Advocate Mr. Kamal Kant Tyagi and the very senior member, expert, and legal analyst Mr. P S Dhingra, to provide comments once again in light of the link provided below.
https://www.citehr.com/108564-sc-jud...-download.html
In the present thread, the initiator of the thread is from Mumbai, as indicated in his profile.
From India, Mumbai
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According to some of the learned members, gratuity is not payable on 4 years and 11 months of service. However, according to other learned members, including Advocate Mr. Kamal Kant Tyagi and a very senior member, expert, and legal analyst Mr. P S Dhingra, gratuity is payable on 4 years and 11 months of service.
In response to the discussion in this thread, only one learned member, kumaracme, voted in favor of gratuity not being payable on 4 years and 11 months of service, while four learned members voted in favor of gratuity being payable on 4 years and 11 months of service.
I am confused. What is the correct answer?
This forum has discussed this topic on many occasions with different views. There is no conclusive answer to this query. Below is a link to one of the threads on a similar topic. I request the learned members, including Advocate Mr. Kamal Kant Tyagi and the very senior member, expert, and legal analyst Mr. P S Dhingra, to provide comments once again in light of the link provided below.
https://www.citehr.com/108564-sc-jud...-download.html
In the present thread, the initiator of the thread is from Mumbai, as indicated in his profile.
From India, Mumbai
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Key words for eligibility of gratuity
At least 5 years of 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. This includes service which may be interrupted due to sickness, accident, leave, absence from duty without leave, lay off, strike, 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 he 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 applicable 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 an accident arising out of and in the course of his employment.
- In the case of a female, she has been on maternity leave; however, the total period of such maternity leave must not exceed twelve weeks.
In the 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 percent of the number of days on which the establishment was in operation during such period.
In my interpretation, a person has to complete five full years of service, out of which if he worked 240 days in the last year, he should be entitled to gratuity.
From India, Pune
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At least 5 years of 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. This includes service which may be interrupted due to sickness, accident, leave, absence from duty without leave, lay off, strike, 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 he 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 applicable 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 an accident arising out of and in the course of his employment.
- In the case of a female, she has been on maternity leave; however, the total period of such maternity leave must not exceed twelve weeks.
In the 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 percent of the number of days on which the establishment was in operation during such period.
In my interpretation, a person has to complete five full years of service, out of which if he worked 240 days in the last year, he should be entitled to gratuity.
From India, Pune
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Dear Fellow Members,
I have not come across any Supreme Court Decision on the eligibility of Gratuity. Even the Controlling Authority under the Payment of Gratuity Act relies on the Madras High Court Judgment of Mettur Beardsell Ltd. Vs. Regional Labour Commissioner. Justice S. M. Abdul Wahab delivered a great judgment, which is a 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 the fifth year. True, if one continuous year is 240 days of work, then 240 days worked in the 5th year must be the eligibility for Gratuity. Nobody disagreed with 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 reading the judgment; it will clear any doubt anybody 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, Layoffs, and Legal strike days for which payments are made to workmen. The legal world unambiguously relies 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
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I have not come across any Supreme Court Decision on the eligibility of Gratuity. Even the Controlling Authority under the Payment of Gratuity Act relies on the Madras High Court Judgment of Mettur Beardsell Ltd. Vs. Regional Labour Commissioner. Justice S. M. Abdul Wahab delivered a great judgment, which is a 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 the fifth year. True, if one continuous year is 240 days of work, then 240 days worked in the 5th year must be the eligibility for Gratuity. Nobody disagreed with 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 reading the judgment; it will clear any doubt anybody 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, Layoffs, and Legal strike days for which payments are made to workmen. The legal world unambiguously relies 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
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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
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From India, Kolhapur
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So many observations have been made by our learned members. However, the requirement of the first five years of service is a must for eligibility for gratuity. The courts have given a judgment for 4 years and 11 months based on the dispute raised before them. But as per the act, it is not so.
From India, New Delhi
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From India, New Delhi
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Dear Pratik, you are not entitled to payment of gratuity. The 240-day concept is applicable for eligibility criteria after the entitlement of gratuity. Suppose an employee has completed 9 years of service. So, he is entitled to payment of gratuity. However, if in his attendance record it is found that he had not completed 240 days in the 7th year, this 7th year will not be included if the person was taking authorized leave as mentioned in the act. Therefore, his 7th year will not be considered for continuous service, and for that year, he will not be entitled to payment of gratuity.
As you have not completed 5 years of service, if you have completed 240 days for the last year, you will still not be entitled to payment of gratuity as per the act. However, if your employer considers this as another case or if you worked as a trainee (other than an apprentice) before that in this company, this period will be included in your total tenure of service. If it surpasses 5 years, you will be entitled to payment of gratuity.
From India, Mumbai
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As you have not completed 5 years of service, if you have completed 240 days for the last year, you will still not be entitled to payment of gratuity as per the act. However, if your employer considers this as another case or if you worked as a trainee (other than an apprentice) before that in this company, this period will be included in your total tenure of service. If it surpasses 5 years, you will be entitled to payment of gratuity.
From India, Mumbai
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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
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From India, Delhi
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Dear Subhasis,
The 240-day concept is not applicable after the eligibility of five years. Could you please share some provisions or case law to support your statement in your post?
I kindly request that you refrain from making frivolous comments that are not based on concrete legal facts. Just to clarify, after five years of service, a person who works even six months, which is just 180 days in a year, is entitled to gratuity for the whole year. The requirement of 240 days is not accurate. I recommend reading the Act in its entirety. This information is provided under Section 4, Subsection 2, and is reproduced below for your reference:
(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 avoid causing confusion among other members. If you have any questions, please ask directly, and if you wish to share information, ensure it is accurate. Incomplete or incorrect information can be misleading and potentially harmful.
Best regards, [Your Name]
From India, New Delhi
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The 240-day concept is not applicable after the eligibility of five years. Could you please share some provisions or case law to support your statement in your post?
I kindly request that you refrain from making frivolous comments that are not based on concrete legal facts. Just to clarify, after five years of service, a person who works even six months, which is just 180 days in a year, is entitled to gratuity for the whole year. The requirement of 240 days is not accurate. I recommend reading the Act in its entirety. This information is provided under Section 4, Subsection 2, and is reproduced below for your reference:
(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 avoid causing confusion among other members. If you have any questions, please ask directly, and if you wish to share information, ensure it is accurate. Incomplete or incorrect information can be misleading and potentially harmful.
Best regards, [Your Name]
From India, New Delhi
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