Expert of the Act is as follows:
4. Payment of Gratuity.- (1) Gratuity shall be payable to an employee on the termination of his employment after he has rendered continuous service for not less than five years,-
(a) on his superannuation, or
(b) on his retirement or resignation,
(c) on his death or disablement due to accident or disease:
Provided that the completion of continuous service of five years shall not be necessary where the termination of the employment of any employee is due to death or disablement:
Provided further that in case of death of the employee, gratuity payable to him shall be paid to his nominee or, if no nomination has been made, to his heirs, and where any such nominees or heirs are minor, the share of such minor shall be deposited with the Controlling Authority who shall invest the same for the benefit of such minor in such bank or other financial institution, as may be prescribed, until such minor attains majority.
Explanation.- For the purposes of this section, disablement means such disablement as incapacitates an employee for the work which he was capable of performing before the accident or disease resulting in such disablement.
(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:
Provided that in the case of a piece-rated employee, daily wages shall be computed on the average of the total wages received by him for a period of three months immediately preceding the termination of his employment, and, for this purpose, the wages paid for any overtime work shall not be taken into account:
Provided further that in the case of an employee who is employed in a seasonal establishment, and who is not so employed throughout the year, the employer shall pay the gratuity at the rate of seven days' wages for each season.
Explanation.- In the case of a monthly rated employee, the fifteen days' wages shall be calculated by dividing the monthly rate of wages last drawn by him by twenty-six and multiplying the quotient by fifteen.
(3) The amount of gratuity payable to an employee shall not exceed ten lakh rupees.
(4) For the purpose of computing the gratuity payable to an employee who is employed, after his disablement, on reduced wages, his wages for the period preceding his disablement shall be taken to be the wages received by him during that period, and his wages for the period subsequent to his disablement shall be taken to be the wages as so reduced.
(5) 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.
From India, Madras
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3204. Payment of Gratuity.- (1) Gratuity shall be payable to an employee on the termination of his employment after he has rendered continuous service for not less than five years,-
(a) on his superannuation, or
(b) on his retirement or resignation,
(c) on his death or disablement due to accident or disease:
Provided that the completion of continuous service of five years shall not be necessary where the termination of the employment of any employee is due to death or disablement:
Provided further that in case of death of the employee, gratuity payable to him shall be paid to his nominee or, if no nomination has been made, to his heirs, and where any such nominees or heirs are minor, the share of such minor shall be deposited with the Controlling Authority who shall invest the same for the benefit of such minor in such bank or other financial institution, as may be prescribed, until such minor attains majority.
Explanation.- For the purposes of this section, disablement means such disablement as incapacitates an employee for the work which he was capable of performing before the accident or disease resulting in such disablement.
(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:
Provided that in the case of a piece-rated employee, daily wages shall be computed on the average of the total wages received by him for a period of three months immediately preceding the termination of his employment, and, for this purpose, the wages paid for any overtime work shall not be taken into account:
Provided further that in the case of an employee who is employed in a seasonal establishment, and who is not so employed throughout the year, the employer shall pay the gratuity at the rate of seven days' wages for each season.
Explanation.- In the case of a monthly rated employee, the fifteen days' wages shall be calculated by dividing the monthly rate of wages last drawn by him by twenty-six and multiplying the quotient by fifteen.
(3) The amount of gratuity payable to an employee shall not exceed ten lakh rupees.
(4) For the purpose of computing the gratuity payable to an employee who is employed, after his disablement, on reduced wages, his wages for the period preceding his disablement shall be taken to be the wages received by him during that period, and his wages for the period subsequent to his disablement shall be taken to be the wages as so reduced.
(5) 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.
From India, Madras
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After completion of 5 years of service, additional time more than 6 months is counted as one year, while less than 6 months is ignored for calculating the service period. We are obligated to implement this formula as per the Gratuity Act. Therefore, the 5.7 years should be counted as 6 years, not five years.
From India, Jalandhar
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From India, Jalandhar
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After completion of 5 years of service, any additional period of more than 6 months is counted as one year, while any period of less than 6 months is ignored when calculating the total service period. We are required to implement this formula as per the Gratuity Act. Therefore, the 5.7 years should be counted as 6 years, not five years.
From India, Jalandhar
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From India, Jalandhar
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In the Gratuity Act, continuous service for 6 months is defined as 120 days of working, including leave, weekly off, paid holiday, and absent without leave. In such a scenario, even after 5.4 years, a staff member is eligible for 6 years of gratuity. Clarity is needed on this matter.
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What is the impact of labour code on social security 2018, in India ?
From India, Mumbai
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From India, Mumbai
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After completion of 5 years service additional more than 2 months. Will I get my Gratuity in consolidated Salary. This is my consolidated Salary Rs.11525/- per month.
From India, Mumbai
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From India, Mumbai
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Dear Manisha,
You will receive gratuity for 5 years, i.e., Basic+DA x 15/26 x 5 = your gratuity amount. If you have mentioned a consolidated salary of Rs.11,525/-, is there any bifurcation such as Basic, HRA, other allowances, or any other allowance? If yes, you will get gratuity on Basic salary x the above formula. If not, your gratuity will be as follows: 11525 x 15/26 x 5 = 33,245 based on your above statement.
Regards,
Suresh
From India, Thane
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You will receive gratuity for 5 years, i.e., Basic+DA x 15/26 x 5 = your gratuity amount. If you have mentioned a consolidated salary of Rs.11,525/-, is there any bifurcation such as Basic, HRA, other allowances, or any other allowance? If yes, you will get gratuity on Basic salary x the above formula. If not, your gratuity will be as follows: 11525 x 15/26 x 5 = 33,245 based on your above statement.
Regards,
Suresh
From India, Thane
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