Dear John,
It seems you are a student and you did research or doing research on gratuity eligibility.
I am very new on this forum. Not even completed 100 days here. But still I wish to advise you not to make any conclusion on any subject on the basis of views over here. Not to believe on links or google. Not to believe even on media news. Read Bare Acts latest editions, case laws and other authentic material. Have your own interpretation. Discuss with experts surround you and apply your mind logically on the subject.
On the current topic you should also read the draft code on social security bill. If Government is considering the lower gratuity threshold, it should reflect in the draft bill. There are many suggestions like this since many years but has no place in the said draft bill and still we discuss on it as if that are the laws in force.
I am not saying that the lower threshold will not come at all but when it will come that time we will discuss on it. Even if it comes there won't be retrospective effect to it. Today the law is, one has to complete 5 years for service to get gratuity. Exception is the HC jurisdiction at Chennai and Kerala.
One can consider gratuity payment even on not completing 4 years 240 days also. No one will object to it. But by virtue of it, no one should consider that this is the law.
From India, Mumbai
183It seems you are a student and you did research or doing research on gratuity eligibility.
I am very new on this forum. Not even completed 100 days here. But still I wish to advise you not to make any conclusion on any subject on the basis of views over here. Not to believe on links or google. Not to believe even on media news. Read Bare Acts latest editions, case laws and other authentic material. Have your own interpretation. Discuss with experts surround you and apply your mind logically on the subject.
On the current topic you should also read the draft code on social security bill. If Government is considering the lower gratuity threshold, it should reflect in the draft bill. There are many suggestions like this since many years but has no place in the said draft bill and still we discuss on it as if that are the laws in force.
I am not saying that the lower threshold will not come at all but when it will come that time we will discuss on it. Even if it comes there won't be retrospective effect to it. Today the law is, one has to complete 5 years for service to get gratuity. Exception is the HC jurisdiction at Chennai and Kerala.
One can consider gratuity payment even on not completing 4 years 240 days also. No one will object to it. But by virtue of it, no one should consider that this is the law.
From India, Mumbai
Dear Friends,
Further to my earlier post, I wish to make it clear that I do not disrespect the different view or interpretation. It has to be justifiable or it has to be with some authentic supporting.
I respect the views on gratuity eligibility on the basic of judgement by HC at judicature Chennai and Kerala but that is not applicable out side its judicature. The law also has not amended. Even the draft code bill also this is not taken care of.
If Madras HC judgement of 1998 is applicable all over India then how the gratuity claim of Sreeja subsequent to this judgement was upheld by controlling authority and the appellate authority reversed the same accepting the contention of the employer that the gratuity entitlement would arise only on completion of five continuous years of service?
I am not denying that one can apply the analogy of these judgements while arguing the case for payment of gratuity on 4 years and 240 days.
From India, Mumbai
Further to my earlier post, I wish to make it clear that I do not disrespect the different view or interpretation. It has to be justifiable or it has to be with some authentic supporting.
I respect the views on gratuity eligibility on the basic of judgement by HC at judicature Chennai and Kerala but that is not applicable out side its judicature. The law also has not amended. Even the draft code bill also this is not taken care of.
If Madras HC judgement of 1998 is applicable all over India then how the gratuity claim of Sreeja subsequent to this judgement was upheld by controlling authority and the appellate authority reversed the same accepting the contention of the employer that the gratuity entitlement would arise only on completion of five continuous years of service?
I am not denying that one can apply the analogy of these judgements while arguing the case for payment of gratuity on 4 years and 240 days.
From India, Mumbai
For eligibility of payment of gratuity completion of 4 years and 240 days is required instead of 4 Years And 183 Days . so payment should not be done eligibility is not completed.
Thanks & Regards,
Sumit Kumar Saxena
From India, Ghaziabad
Thanks & Regards,
Sumit Kumar Saxena
From India, Ghaziabad
Dear friends,
Eligibility to gratuity payment for those rendered short of 5 yrs "continuous service" was discussed in this forum repeatedly. Many estabilshments accepted & paid gratuity on the strength of Madras HC judgement concluding 4 yrs & 240 days in the 5th year will do the eligibility cretieria. Where as others raising doubts, will the Madras HC judgement suo motu apply rest of the states since there has been no clear amendment to the Act per se- "5 yrs" stipulation. This trend continues even when the Hon'ble SC also held that 4yrs + 240 days in the 5th for determining 'continuous service' meets the eligibility criteria in the case of "LALAPPA LINGAPPA & ORS V. LAXMI VISHNU TEXTILE MILLS LTD., SHOLAPUR [1981] RD-SC 29 (11 February 1981)".
I think it should suffice to say contents of this judgement is applicable not only the proper state of Maharashtra, from where the 'cause of action' arose but the entire nation as per the Constitution of India. Apart from this SC judgement one more SC judgement also is available upholding the 4 yrs+ 240 days norms for determining what makes a 'continuous service' which I quoted in this column a few years ago, will repost it shortly.
https://www.citehr.com/473683-gratui...ml#post2098224
https://www.citehr.com/440537-gratui...ml#post1993632
https://www.citehr.com/337506-can-gr...ml#post2162288
https://www.citehr.com/517210-gratui...ml#post2402006
https://www.citehr.com/440537-gratui...-10-a-pg2.html
https://www.citehr.com/440537-gratui...ml#post1993632
I may quote from the cited SC judgement exerpts reads as follows (it is lengthy to reproduce here but worth the space & time taken in order to remove the doubts still linkering):
...." The significance of this legislation lies in the acceptance of the principle of gratuity as a compulsory, statutory retiral benefit.
For a proper appreciation of the question involved, it is necessary to set out the relevant provisions of the Act.
Sub-section (1) of s. 4 reads as follows :
4. (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 801 (b) on his retirement or resignation, or (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 the 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.
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.
The expression 'continuous service' has been defined in s.
2(c) of the Act in these terms :
2. (c) "continuous service" means uninterrupted service and includes service which is interrupted by sickness, accident, leave, lay-off, strike or a lock- out or cessation of work not due to any fault of the employee concerned, whether such uninterrupted or interrupted service was rendered before or after the commencement of this Act.
Explanation I.-In the case of an employee who is not in uninterrupted service for one year, he shall be deemed to be in continuous service if he has been actually employed by an employer during the twelve months immediately preceding the year for not less than- (i) 190 days, if employed below the ground in a mine, or (ii) 240 days, in any other case, except when he is employed in a seasonal establishment.
Explanation II.-An employee of a seasonal establishment shall be deemed to be in continuous service 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 the year.
The Act is a piece of social welfare legislation and deals with matters relating to payment of gratuity which, like pension, provident 802 fund etc., is a retiral benefit. Interrupted service by reason of sickness, leave, lay-off, strike, lock-out or cessation of work not due to any fault of the employee concerned should not be regarded as a break in continuity of his service. The inclusive part of the definition of 'continuous service' in s. 2(c) is to amplify the meaning of the expression by including interrupted service under certain contingencies which, but for such inclusion, would not fall within the ambit of the expression 'continuous service'. There were compelling reasons why the legislature gave an enlarged meaning to the expression 'continuous service' in s. 2(c) of the Act, so that the workers who have rendered long and meritorious service are not deprived of their right to gratuity by reason of absence from duty due to circumstances beyond their control.
The two Explanations have been inserted by the legislature to define the words 'one completed year of service' to benefit a class of employees who are not in uninterrupted service for one year. These Explanations employ a fiction which converts service of (a) 190 days, if employed below the ground in a mine, (b) 240 days, in any other case except when employed in a seasonal establishment, in a period of 12 calendar months, or (c) 75 per cent of the number of days which the seasonal establishment was in operation, to be one complete year.....
....In a case falling under Explanation I, an employee is deemed to be in continuous service if he has been actually employed for not less than 190 days if employed below the ground in a mine, or 240 days in any other case, except when he is employed in a seasonal establishment. In a case falling under Explanation II, an employee of a seasonal establishment, is deemed to be in continuous service if he has actually worked for not less than 75 per cent of the number of days on which the establishment was in operation during the year"...
From India, Bangalore
Eligibility to gratuity payment for those rendered short of 5 yrs "continuous service" was discussed in this forum repeatedly. Many estabilshments accepted & paid gratuity on the strength of Madras HC judgement concluding 4 yrs & 240 days in the 5th year will do the eligibility cretieria. Where as others raising doubts, will the Madras HC judgement suo motu apply rest of the states since there has been no clear amendment to the Act per se- "5 yrs" stipulation. This trend continues even when the Hon'ble SC also held that 4yrs + 240 days in the 5th for determining 'continuous service' meets the eligibility criteria in the case of "LALAPPA LINGAPPA & ORS V. LAXMI VISHNU TEXTILE MILLS LTD., SHOLAPUR [1981] RD-SC 29 (11 February 1981)".
I think it should suffice to say contents of this judgement is applicable not only the proper state of Maharashtra, from where the 'cause of action' arose but the entire nation as per the Constitution of India. Apart from this SC judgement one more SC judgement also is available upholding the 4 yrs+ 240 days norms for determining what makes a 'continuous service' which I quoted in this column a few years ago, will repost it shortly.
https://www.citehr.com/473683-gratui...ml#post2098224
https://www.citehr.com/440537-gratui...ml#post1993632
https://www.citehr.com/337506-can-gr...ml#post2162288
https://www.citehr.com/517210-gratui...ml#post2402006
https://www.citehr.com/440537-gratui...-10-a-pg2.html
https://www.citehr.com/440537-gratui...ml#post1993632
I may quote from the cited SC judgement exerpts reads as follows (it is lengthy to reproduce here but worth the space & time taken in order to remove the doubts still linkering):
...." The significance of this legislation lies in the acceptance of the principle of gratuity as a compulsory, statutory retiral benefit.
For a proper appreciation of the question involved, it is necessary to set out the relevant provisions of the Act.
Sub-section (1) of s. 4 reads as follows :
4. (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 801 (b) on his retirement or resignation, or (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 the 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.
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.
The expression 'continuous service' has been defined in s.
2(c) of the Act in these terms :
2. (c) "continuous service" means uninterrupted service and includes service which is interrupted by sickness, accident, leave, lay-off, strike or a lock- out or cessation of work not due to any fault of the employee concerned, whether such uninterrupted or interrupted service was rendered before or after the commencement of this Act.
Explanation I.-In the case of an employee who is not in uninterrupted service for one year, he shall be deemed to be in continuous service if he has been actually employed by an employer during the twelve months immediately preceding the year for not less than- (i) 190 days, if employed below the ground in a mine, or (ii) 240 days, in any other case, except when he is employed in a seasonal establishment.
Explanation II.-An employee of a seasonal establishment shall be deemed to be in continuous service 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 the year.
The Act is a piece of social welfare legislation and deals with matters relating to payment of gratuity which, like pension, provident 802 fund etc., is a retiral benefit. Interrupted service by reason of sickness, leave, lay-off, strike, lock-out or cessation of work not due to any fault of the employee concerned should not be regarded as a break in continuity of his service. The inclusive part of the definition of 'continuous service' in s. 2(c) is to amplify the meaning of the expression by including interrupted service under certain contingencies which, but for such inclusion, would not fall within the ambit of the expression 'continuous service'. There were compelling reasons why the legislature gave an enlarged meaning to the expression 'continuous service' in s. 2(c) of the Act, so that the workers who have rendered long and meritorious service are not deprived of their right to gratuity by reason of absence from duty due to circumstances beyond their control.
The two Explanations have been inserted by the legislature to define the words 'one completed year of service' to benefit a class of employees who are not in uninterrupted service for one year. These Explanations employ a fiction which converts service of (a) 190 days, if employed below the ground in a mine, (b) 240 days, in any other case except when employed in a seasonal establishment, in a period of 12 calendar months, or (c) 75 per cent of the number of days which the seasonal establishment was in operation, to be one complete year.....
....In a case falling under Explanation I, an employee is deemed to be in continuous service if he has been actually employed for not less than 190 days if employed below the ground in a mine, or 240 days in any other case, except when he is employed in a seasonal establishment. In a case falling under Explanation II, an employee of a seasonal establishment, is deemed to be in continuous service if he has actually worked for not less than 75 per cent of the number of days on which the establishment was in operation during the year"...
From India, Bangalore
Dear Prof. Kumar,
This will be probably my last post on Gratuity.
It is very incorrect to say that for payment of gratuity the Hon'ble SC also held that 4yrs + 240 days in the 5th for determining 'continuous service' meets the eligibility criteria in the case of "LALAPPA LINGAPPA & ORS V. LAXMI VISHNU TEXTILE MILLS LTD., SHOLAPUR [1981] RD-SC 29 (11 February 1981)".
This matter is not pertaining to Payment of Gratuity Act which is a independent enactment under Social Security.
Again, how the Madras HC (1998) and Kerala HC (2015) entertain the applications when there is SC judgement (1981)?
If any employer is considering gratuity for 4 years and 240 days in fifth year or even for lesser service than this, I have no objection. But that is not the LAW. LAW is what is stated in the POG Act which is not yet amended upon the interpretation by the HC at judicature Chennai and Kerala.
I am sorry to have this kind of conversation with you. I even respect the judgements by HC at judicature Chennai and Kerala. I said it earlier.
With this I conclude this topic for my self and to whom I advise.
From India, Mumbai
This will be probably my last post on Gratuity.
It is very incorrect to say that for payment of gratuity the Hon'ble SC also held that 4yrs + 240 days in the 5th for determining 'continuous service' meets the eligibility criteria in the case of "LALAPPA LINGAPPA & ORS V. LAXMI VISHNU TEXTILE MILLS LTD., SHOLAPUR [1981] RD-SC 29 (11 February 1981)".
This matter is not pertaining to Payment of Gratuity Act which is a independent enactment under Social Security.
Again, how the Madras HC (1998) and Kerala HC (2015) entertain the applications when there is SC judgement (1981)?
If any employer is considering gratuity for 4 years and 240 days in fifth year or even for lesser service than this, I have no objection. But that is not the LAW. LAW is what is stated in the POG Act which is not yet amended upon the interpretation by the HC at judicature Chennai and Kerala.
I am sorry to have this kind of conversation with you. I even respect the judgements by HC at judicature Chennai and Kerala. I said it earlier.
With this I conclude this topic for my self and to whom I advise.
From India, Mumbai
Dear friends,
I think this thread is now full of interpretations of members in detail which, to my mind,
is not serving the purpose to which it is intended for. The poster did not get a concrete
reply.
The poster wants to know the eligibility of gratuity payment on completion of 4 yrs and 183 days. At one stage in his poster, he admits that his company informed about the ineligibility for gratuity payment as the eligibility criteria is not met.
Clear one line answer was given to him (query no.2).
From India, Aizawl
I think this thread is now full of interpretations of members in detail which, to my mind,
is not serving the purpose to which it is intended for. The poster did not get a concrete
reply.
The poster wants to know the eligibility of gratuity payment on completion of 4 yrs and 183 days. At one stage in his poster, he admits that his company informed about the ineligibility for gratuity payment as the eligibility criteria is not met.
Clear one line answer was given to him (query no.2).
From India, Aizawl
Dear friends,
The PG Act and the Rules made thereunder when also read together should clear the air.
Please read the highlighted portions of Rules-Form-U, pages 26 & 27 (attached in full). I don't think anymore explanatory notes would be needed.
From India, Bangalore
The PG Act and the Rules made thereunder when also read together should clear the air.
Please read the highlighted portions of Rules-Form-U, pages 26 & 27 (attached in full). I don't think anymore explanatory notes would be needed.
From India, Bangalore
Dear friend, Service of 4 yrs & 183 days, beyond doubt, not eligible. This has been opined by many of our members. No ambiguity. What’s still continuing is, as you know, 4+240 days.
From India, Bangalore
From India, Bangalore
Hi Mercury2007,
From the discussion what I understand is that you had been working in an IT firm. If the firm had a working duration of less than 6 days in a week, like for example having saturday and sunday off, this could put the eligibility period at 4 years and 190 calendar days. If not, it should be as per the usual duration of 4 years and 240 days.
In either case, I believe it is clear that you would not be eligible for the gratuity payment. As for the gratuity provision which had been part of the CTC stack I do not see any way to get this paid out to you.
From India, Bengaluru
From the discussion what I understand is that you had been working in an IT firm. If the firm had a working duration of less than 6 days in a week, like for example having saturday and sunday off, this could put the eligibility period at 4 years and 190 calendar days. If not, it should be as per the usual duration of 4 years and 240 days.
In either case, I believe it is clear that you would not be eligible for the gratuity payment. As for the gratuity provision which had been part of the CTC stack I do not see any way to get this paid out to you.
From India, Bengaluru
Dear Prof. Kumar,
Thanks for quoting the Lalappa Lingappa case. I mistakenly taken it as Surendra Kumar Varma case and said that this matter is not pertaining to Payment of Gratuity Act. I am sorry for that.
But, the Lalappa Lingappa case reminded me that the definition of ‘continuous service’ was introduced by insertion of an independent section 2A by way of amendment in 1984 effective from 1981 which was following this case of Lallappa Ligganppa only.
I remember this and therefore made further study when came across one thread on this forum only in which Adv. Keshav Kogaonkar from Mumbai interacted on same subject and his interaction was appreciated by our senior member none other than Umakanthan Sir and KK!HR who is one of the most appreciated members & Super Moderator at this forum.
The said thread is given in the link below:
https://www.citehr.com/591113-what-m...tuity-act.html
According to me the concept of Gratuity for long service has not been given complete go-bye, but provision has been made to pay the gratuity to those who are in service for five years and more.
I would like like to draw your attention to the judgement of H'ble SC in Straw Board Mfg. Co. 1977 II (LLJ 463).
It was observed by H’ble SC in this case that the sense of national consciousness is reflected in Gratuity Act which fixes the period of 5 years as the qualifying year for earning gratuity.
The concept of gratuity was initially to be gratuitous payment for long and meritorious service rendered by the employee in an organisation. The qualifying length was reduced to 5 years and the law was enacted in 1972.
In fact I had decided not to contribute any more on this subject. But since I made a mistake in reading Lalappa Lingappa case as Surendra Kumar Varma case, I thought of posting it.
Many learned professionals though they do not contribute here on CiteHR but read it, which I know. To them message should not go wrong. This is the purpose of this post.
From India, Mumbai
Thanks for quoting the Lalappa Lingappa case. I mistakenly taken it as Surendra Kumar Varma case and said that this matter is not pertaining to Payment of Gratuity Act. I am sorry for that.
But, the Lalappa Lingappa case reminded me that the definition of ‘continuous service’ was introduced by insertion of an independent section 2A by way of amendment in 1984 effective from 1981 which was following this case of Lallappa Ligganppa only.
I remember this and therefore made further study when came across one thread on this forum only in which Adv. Keshav Kogaonkar from Mumbai interacted on same subject and his interaction was appreciated by our senior member none other than Umakanthan Sir and KK!HR who is one of the most appreciated members & Super Moderator at this forum.
The said thread is given in the link below:
https://www.citehr.com/591113-what-m...tuity-act.html
According to me the concept of Gratuity for long service has not been given complete go-bye, but provision has been made to pay the gratuity to those who are in service for five years and more.
I would like like to draw your attention to the judgement of H'ble SC in Straw Board Mfg. Co. 1977 II (LLJ 463).
It was observed by H’ble SC in this case that the sense of national consciousness is reflected in Gratuity Act which fixes the period of 5 years as the qualifying year for earning gratuity.
The concept of gratuity was initially to be gratuitous payment for long and meritorious service rendered by the employee in an organisation. The qualifying length was reduced to 5 years and the law was enacted in 1972.
In fact I had decided not to contribute any more on this subject. But since I made a mistake in reading Lalappa Lingappa case as Surendra Kumar Varma case, I thought of posting it.
Many learned professionals though they do not contribute here on CiteHR but read it, which I know. To them message should not go wrong. This is the purpose of this post.
From India, Mumbai
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Less than 5 years service - Eligibility for payment of gratuity.pdf