Dear learning friend,
Sorry to say that with mediocre knowledge you are taking initiation to criticise others. Continous service of 4 years +240 days in sole orgn. is criteria for gratuitity eligiblity. You are advised to consult HR savvy or go through remarkable judgements regarding this dispute.
Bai,
Sathish
From India, Jaipur
1Sorry to say that with mediocre knowledge you are taking initiation to criticise others. Continous service of 4 years +240 days in sole orgn. is criteria for gratuitity eligiblity. You are advised to consult HR savvy or go through remarkable judgements regarding this dispute.
Bai,
Sathish
From India, Jaipur
Hi friend, find the attached herewith case law which saying 240 days service is consider for one completion. Regards, Shyam Pandirkar 9870166192
From India, Mumbai
From India, Mumbai
Dear Ootb, I find several replies not satisfying your query.
However, I may like to attempt to satisfy your queries, as follows:
1) You query that a person has served the organization is somewhat incomplete in as much as whether he resigned from service, or was terminated by the company on serving due notice, or was terminated on account of his riotous activities. The gratuity law is some what different on case to case basis. If he has resigned from service or terminated by the company after his 4 1/2 years of service, as per Section 4(1) of the Payment of Gratuity Act 1972, he is not entitled for any gratuity unless he has completed 5 years of minimum service in the organization. However, if the company has different, but favourable set of rules that allow gratuity with lesser period of service to cover 4 1/2 years of service, he would become eligible for gratuity under the provisions of that set of company rules, as per Section 4 (5) of the Act. But, if the employee has been terminated/dismissed due to his willful omission or negligence causing any damage or loss to, or destruction of, property belonging to the employer the gratuity can be forfeited to the extent of the damage or loss so caused under the provisions of Section 4 (6)(a) or (b), even if he is eligible for gratuity under the favourable company rules.
2) Notice period is surely a part of his service, as he serves the organisation during that period.
3) Payment of Gratuity Act overrides the Companys own set of Gratuity rules if those are disadvantageous to the employees as compared to the Payment of Gratuity Act. However, if the company rules are more liberal, the Gratuity Act is not supposed to override the set of rules of the company, as the Payment of Gratuity Act provides the barest minimum benefits to the employees that a company should not deprive him of.
4) There is no such distinction between the Indian or Foreign companies, if the foreign company is established under the Companies Act of India. The companies have compulsorily abide by the laws of the land.
I hope by now your queries would have been satisfied to the most.
I am however attaching a copy of the Payment of Gratuity Act for the benfit of one and all community members for reference purposes.
PS Dhingra
Vigilance & Transformation Management Consultant
Dhingra management & Educational Consultancy Group
New Delhi
From India, Delhi
However, I may like to attempt to satisfy your queries, as follows:
1) You query that a person has served the organization is somewhat incomplete in as much as whether he resigned from service, or was terminated by the company on serving due notice, or was terminated on account of his riotous activities. The gratuity law is some what different on case to case basis. If he has resigned from service or terminated by the company after his 4 1/2 years of service, as per Section 4(1) of the Payment of Gratuity Act 1972, he is not entitled for any gratuity unless he has completed 5 years of minimum service in the organization. However, if the company has different, but favourable set of rules that allow gratuity with lesser period of service to cover 4 1/2 years of service, he would become eligible for gratuity under the provisions of that set of company rules, as per Section 4 (5) of the Act. But, if the employee has been terminated/dismissed due to his willful omission or negligence causing any damage or loss to, or destruction of, property belonging to the employer the gratuity can be forfeited to the extent of the damage or loss so caused under the provisions of Section 4 (6)(a) or (b), even if he is eligible for gratuity under the favourable company rules.
2) Notice period is surely a part of his service, as he serves the organisation during that period.
3) Payment of Gratuity Act overrides the Companys own set of Gratuity rules if those are disadvantageous to the employees as compared to the Payment of Gratuity Act. However, if the company rules are more liberal, the Gratuity Act is not supposed to override the set of rules of the company, as the Payment of Gratuity Act provides the barest minimum benefits to the employees that a company should not deprive him of.
4) There is no such distinction between the Indian or Foreign companies, if the foreign company is established under the Companies Act of India. The companies have compulsorily abide by the laws of the land.
I hope by now your queries would have been satisfied to the most.
I am however attaching a copy of the Payment of Gratuity Act for the benfit of one and all community members for reference purposes.
PS Dhingra
Vigilance & Transformation Management Consultant
Dhingra management & Educational Consultancy Group
New Delhi
From India, Delhi
Dear All,
An employee having worked for more than 240 days in the fifth year will be eligible for Gratuity, as has been held by the honourable high court of Madras, reported in Mettur Beardsell Limited, Madras Vs. Regional Labour Commissioner (Central), Madras & others 1998 LLR 1072 (Mad. HC).
with best regards
B.L.Rao [BANDARU.LR@GMAIL.COM]
From India, Visakhapatnam
An employee having worked for more than 240 days in the fifth year will be eligible for Gratuity, as has been held by the honourable high court of Madras, reported in Mettur Beardsell Limited, Madras Vs. Regional Labour Commissioner (Central), Madras & others 1998 LLR 1072 (Mad. HC).
with best regards
B.L.Rao [BANDARU.LR@GMAIL.COM]
From India, Visakhapatnam
last drawn salary(basic+da/vda)*year of service*15/26, sumit kumar saxena, 9899669071, 0120-4131277
From India, Ghaziabad
From India, Ghaziabad
I am curious why gratuity is not included in ctc calculation? ctc is "cost to company"...corrrect? Since gratuity is a "cost to company" (a liability the company needs to accrue for...or has insured externally), it seems to me it is a cost to company (liability expense) even if the associate has not worked for the company for 5 years. Any perspective would be helpful. Thank you, David Bailey
From United States, Kansas City
From United States, Kansas City
I have completed 5 years in my company and now the company is changing the status from Liaison office to India Private limited. And giving Gratuity to all emplyoees even those who have not completed 5 years also. My question is that is leagal to give Gratuity at this stage because may be I will work in same company for another 5 years or more and the gratuity will be on that last salary drawn. I think I am the looser in this case. As on this amount I have to pay Income tax also where as Gratuity upto 3.5lac as on tdy and after 1st April 2010 will be 10lac tax free.
please advise on my issue.
thanks
From United States, New York
please advise on my issue.
thanks
From United States, New York
Dear Friend
A person who was working in private or Limited organization , he is eligibale for the gratuity. The second answer of your question : If he was working 4 and 1/2 years than he was not eligibale for the same because the limit of the gratuity is 5 years.
Thanks.
Kalpesh Parmar
From India, Ahmadabad
A person who was working in private or Limited organization , he is eligibale for the gratuity. The second answer of your question : If he was working 4 and 1/2 years than he was not eligibale for the same because the limit of the gratuity is 5 years.
Thanks.
Kalpesh Parmar
From India, Ahmadabad
Hi all,Gratuity is a part of CTC.CTC is defined as the total cost beared by the company for an employee.Hence Gratuity/PF/Medical Insurance[if any/ all comes under CTC,Although it is paid as per Payment of Gratuity Act, 1972.For an employee to be elligible for gratuity,he should minimum complete 4 yrs and 240 days.
but again some companies pay exgratia to the employee even after his leaving of service before 1 year,but in such cases gratuity is not calculated as the formula defined by the act.Just the accumulated amount is given.
For employee worked more than 4yrs 240 days formula for calculating Gratuity is:
Last Basic/26*15days*no of years
Eg:Last Basic:10000
No of years worked:4.8 [4yrs 8 month-rounded to 5 yrs,if it 4.4,it wil be rounded to 4 years]
Gratuity:10000/26*15*5
=>384.6*75
=>28,846
Experts,plz correct if i am wrong
Thanks
Amrita Mishra/Sachin lala
CA/HR-Comp&Ben
From India, Dhanbad
but again some companies pay exgratia to the employee even after his leaving of service before 1 year,but in such cases gratuity is not calculated as the formula defined by the act.Just the accumulated amount is given.
For employee worked more than 4yrs 240 days formula for calculating Gratuity is:
Last Basic/26*15days*no of years
Eg:Last Basic:10000
No of years worked:4.8 [4yrs 8 month-rounded to 5 yrs,if it 4.4,it wil be rounded to 4 years]
Gratuity:10000/26*15*5
=>384.6*75
=>28,846
Experts,plz correct if i am wrong
Thanks
Amrita Mishra/Sachin lala
CA/HR-Comp&Ben
From India, Dhanbad
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Gratuity Eligibility.pdf
Gratuity eligibility for less than 5 yrs. (4yrs.240days). docx