Dear Ashutosh ji,
Thanks for appreciating my last post.
My humble submission here is as under:
On this subject I have contributed enough with the limited knowledge I have. I do not wish to contribute further as said earlier. Let's experts / senior members contribute.
From India, Mumbai
2556Thanks for appreciating my last post.
My humble submission here is as under:
On this subject I have contributed enough with the limited knowledge I have. I do not wish to contribute further as said earlier. Let's experts / senior members contribute.
From India, Mumbai
Dear Sir/s,
From the above discussions, I understand that if an organisation is working 6 days a week, in that case 240 days of continuous service in the 5th year, is sufficient to be considered as complete year service for payment of gratuity, which requires 5 years of continuous service.
The 240 days of continuous service in the 5th year mentioned here are completed in 10 months and 11 days (=315 days = 45 weeks) in the 5th year of service.
Can someone explain how 240 days continuous service gets completed in 10 months and 11 days ?
Regards,
Harsh Gupta
From India, Gandhinagar
From the above discussions, I understand that if an organisation is working 6 days a week, in that case 240 days of continuous service in the 5th year, is sufficient to be considered as complete year service for payment of gratuity, which requires 5 years of continuous service.
The 240 days of continuous service in the 5th year mentioned here are completed in 10 months and 11 days (=315 days = 45 weeks) in the 5th year of service.
Can someone explain how 240 days continuous service gets completed in 10 months and 11 days ?
Regards,
Harsh Gupta
From India, Gandhinagar
I did not get what exactly your query is. If your concern is about 240 days over a period of 10 months and 11 days I would like to say that 240 days is not the days physically present but the days for which payment of wages have been made. That means, it should include all holidays, weekly off days and paid leave days.
There have been discussions over the issue of 240 days in the 5th year as a qualifying period for gratuity for a long time and the situation remain the same. Still, if you follow the Payment of Gratuity Act, the gratuity qualifying service is 5 years. It is true that in order to be considered as continuous service for the purpose of gratuity a period of 12 months should have at least 240 paid days. It is on this basis that many of us say that if you have 240 paid days in the 5th year you will get gratuity because one year means 240 days. The two judgements that many of us quote also have also interpreted the provision of one year service as 240 days.
Madhu T K
From India, Kannur
There have been discussions over the issue of 240 days in the 5th year as a qualifying period for gratuity for a long time and the situation remain the same. Still, if you follow the Payment of Gratuity Act, the gratuity qualifying service is 5 years. It is true that in order to be considered as continuous service for the purpose of gratuity a period of 12 months should have at least 240 paid days. It is on this basis that many of us say that if you have 240 paid days in the 5th year you will get gratuity because one year means 240 days. The two judgements that many of us quote also have also interpreted the provision of one year service as 240 days.
Madhu T K
From India, Kannur
Sir,
In one of the above posts following point has been mentioned with reference to judgement of the Supreme Court-
"The judgment of Supreme Court rendered under the provisions of the Industrial Dispute Act in Surendra Kumar Verma vs. Central Govt. Industrial Tribunal,[(1980) (4) S.C.C.433)], it is enough that an employee has a service of 240 days in the preceding 12 months and it is not necessary that he should have completed one whole year’s service. As the definition of continuous service in Industrial Dispute Act and Payment of Gratuity Act are synonymous, the same principal can be adopted under the act also and hence an employee rendering service of 4 year 10months 11days is considered to have completed 5 years continuous service under sec.4(2) and thereby is eligible for gratuity."
My query is related to requirement of service period for eligibility of Gratuity-
My organisation does not work on 2nd and 4th Saturday every month. Hence, my case falls in between 5 day working and 6 day working.
My service period in the organisation is 4 yrs and 244 days as on last date of my services.
Whether I will be eligible for receiving Gratuity Payment from my organisation?
Regards
From India, Gandhinagar
In one of the above posts following point has been mentioned with reference to judgement of the Supreme Court-
"The judgment of Supreme Court rendered under the provisions of the Industrial Dispute Act in Surendra Kumar Verma vs. Central Govt. Industrial Tribunal,[(1980) (4) S.C.C.433)], it is enough that an employee has a service of 240 days in the preceding 12 months and it is not necessary that he should have completed one whole year’s service. As the definition of continuous service in Industrial Dispute Act and Payment of Gratuity Act are synonymous, the same principal can be adopted under the act also and hence an employee rendering service of 4 year 10months 11days is considered to have completed 5 years continuous service under sec.4(2) and thereby is eligible for gratuity."
My query is related to requirement of service period for eligibility of Gratuity-
My organisation does not work on 2nd and 4th Saturday every month. Hence, my case falls in between 5 day working and 6 day working.
My service period in the organisation is 4 yrs and 244 days as on last date of my services.
Whether I will be eligible for receiving Gratuity Payment from my organisation?
Regards
From India, Gandhinagar
As already pointed out, even when the Madras High Court view was in existence many authorities under the Payment of Gratuity Act had refused to grant gratuity saying that there is no Supreme Court view on this and since the Act makes it very clear that completion of 5 years is mandatory for being eligible for gratuity, an employee who has not completed 5 years but has a service of 240 days in the fifth year is not eligible to get gratuity. When the Kerala High Court verdict came, the same was again opened and the appropriate authorities in Kerala started ordering payment of gratuity to persons who have not completed 5 years of service but have had 4 years and 240 days of service.
The issue of retrenchment compensation is different. In order to be eligible to get retrenchment compensation, just a service of one year is sufficient. In the case of gratuity, it is not one year but 5 years. It is true that 240 days of service constitutes one year under both the Act. It is so in the case of eligibility for leave under Factories Act and Plantations Labour Act.
For eligibility of gratuity one should have worked for not less than 5 years continuously with each year having at least 240 days (paid days). If you have worked for more than 5 years, say, 8 years but in between there are, say, four years with service of less than 240 days, the employee will not get gratuity. In this context we should also consider that if the employee has not "worked" for 240 days but was "employed" for 240 days, he will get gratuity. And if an employee "employed", has remained absent without leave and as a result of his absence, he could not work for 240 days, then he will not get gratuity. These equations are true in the case of temporary workers who are not "employed" continuously on the rolls of the employer but are called or engaged to "work" whenever required.
Therefore, the first qualifying parameter is 5 years of service and the second thing is that each year should have 240 days pay days. When the first milestone is not reached, naturally, he will disqualify from gratuity. At the same time, Madras High Court and Kerala High Court, having interpreted the Gratuity Act to make it available to persons who were not employed for 5 years but were employed for 4 years and 240 days in the 5th year, we can also follow it. But, if your employer rejects saying that you have not completed 5 years and then the Appropriate authority, ie, the Labour Officer, supports it, you will have no other choice but to prefer a complaint interpreting the law as above and quoting the above two verdicts.
Madhu T K
From India, Kannur
The issue of retrenchment compensation is different. In order to be eligible to get retrenchment compensation, just a service of one year is sufficient. In the case of gratuity, it is not one year but 5 years. It is true that 240 days of service constitutes one year under both the Act. It is so in the case of eligibility for leave under Factories Act and Plantations Labour Act.
For eligibility of gratuity one should have worked for not less than 5 years continuously with each year having at least 240 days (paid days). If you have worked for more than 5 years, say, 8 years but in between there are, say, four years with service of less than 240 days, the employee will not get gratuity. In this context we should also consider that if the employee has not "worked" for 240 days but was "employed" for 240 days, he will get gratuity. And if an employee "employed", has remained absent without leave and as a result of his absence, he could not work for 240 days, then he will not get gratuity. These equations are true in the case of temporary workers who are not "employed" continuously on the rolls of the employer but are called or engaged to "work" whenever required.
Therefore, the first qualifying parameter is 5 years of service and the second thing is that each year should have 240 days pay days. When the first milestone is not reached, naturally, he will disqualify from gratuity. At the same time, Madras High Court and Kerala High Court, having interpreted the Gratuity Act to make it available to persons who were not employed for 5 years but were employed for 4 years and 240 days in the 5th year, we can also follow it. But, if your employer rejects saying that you have not completed 5 years and then the Appropriate authority, ie, the Labour Officer, supports it, you will have no other choice but to prefer a complaint interpreting the law as above and quoting the above two verdicts.
Madhu T K
From India, Kannur
Hi all Please let me know that, if an employee works 9 years and 7 month what will be his number of served years whether 9 years or 10 years. regards / ramesh/Ambur.
From India, Mumbai
From India, Mumbai
Dear Ramesh ji,
I welcome your first ever post on this forum.
I am producing section 4(2) of POG Act verbatim as under:
Sec 4(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.
What does it mean part thereof in excess of six months?
According to this, more than six months is to be taken as full year.
From India, Mumbai
I welcome your first ever post on this forum.
I am producing section 4(2) of POG Act verbatim as under:
Sec 4(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.
What does it mean part thereof in excess of six months?
According to this, more than six months is to be taken as full year.
From India, Mumbai
Dear Keshav Korgaonkar Ji, Thank you very much for your valuable reply and can you give me any case reference for the same. thanks and regards. ramesh/Ambur.
From India, Mumbai
From India, Mumbai
Dear Ramesh ji,
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. This is the Law. I have given you the provision verbatim. There is no ambiguity in it. The wordings are beyond clarity. Still you want case reference. Why?
You are a HR professional. If you have a doubt in the provision or have a dispute in it, you are free to represent your case, set a case law and and give the case reference to this forum.
From India, Mumbai
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. This is the Law. I have given you the provision verbatim. There is no ambiguity in it. The wordings are beyond clarity. Still you want case reference. Why?
You are a HR professional. If you have a doubt in the provision or have a dispute in it, you are free to represent your case, set a case law and and give the case reference to this forum.
From India, Mumbai
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