Dear Shri Umakanthan
Thanks for your enlightened response. While respecting your views on the issue, I am, for the following reasons, unable to persuade myself to subscribe to your view that Sections 4(1) and 2-A shall not be read jointly but independently.
1)Sec.2-A does not determine eligibility for gratuity. It only provides a formula to the employer to compute continuous service under two situations as envisaged under Sub-sections(1) & (2) of Sec.2-A.
2) The object of Sec.2-A is to ensure that an employee does not loose his claim for gratuity by literal interpretation of the expression ‘continuous service’ as it is not possible for an employee to be literally in uninterrupted service for a given period (say five years for example) in view of the contingencies of human life which require him to abstain from duty for various reasons like illness etc or his services are terminated before he completes a spell of 12 months. Thus it adopts a liberal interpretation having regard to the spirit and objectives of a beneficial legislation like Gratuity Act.
3)Sec.2-A does no more than this. It does not say that an employee is eligible for gratuity. There is not even a whisper about eligibility in Sec.2-A. No employee can stake his eligibility under Sec 2-A. An employee asserts his eligibility under Sec.4(1) only.
4)Once an employee submits his application for gratuity with details of the period of service in the relevant columns, the employer initiates the process of computation of his service period. I would like to refer to the following sequence of steps that take place from the stage of submitting application for gratuity till the making of decision to grant his gratuity to corroborate the view that both Sections 4(1) and 2-A complement each other to be read conjointly.
i) First step : Employee submits his application for gratuity with details of the period of service in terms of Rule (7) under Sec.4(1).
ii) Second step : Once the application is submitted, the scene of action shifts to Sec.2-A as under.
On receipt of application, the employer proceeds to satisfy himself whether the employee has completed five years or more by verifying the date of his joining and the date of resignation or retirement or termination as the case may be. He will verify whether the period is interrupted by any periods of break-in-service or if interrupted, whether the interruptions are permissible under law to ensure that the period is continuous. Thus this whole exercise is undertaken by the employer falls within the purview of computation of continuous service under Sec.2-A. It is inevitable for the employer to conduct this exercise as this is concomitant t o ascertaining g his eligibility u/sec.4(1).
iii) Once he is satisfied that the employee was in continuous service for 5 years or more, the employer upholds his eligibility under Sec.4(1) and grants his gratuity.
Thus the above procedural exercise, in my view, abundantly substantiates that Sec.4(1) and Sec2-A are as inseparable as the Siamese twins and need to be read conjointly only.
5) If it is so, the benefits of fictional service of one year under subsection(2) of sec.2A need to be allowed to employees in deserving cases.
However when there is a query seeking to know what is the qualifying service to be eligible to claim gratuity, the proper reply can be five years of continuous service but not four years and eight months.
B.Saikumar
Mumbai
From India, Mumbai
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1931Thanks for your enlightened response. While respecting your views on the issue, I am, for the following reasons, unable to persuade myself to subscribe to your view that Sections 4(1) and 2-A shall not be read jointly but independently.
1)Sec.2-A does not determine eligibility for gratuity. It only provides a formula to the employer to compute continuous service under two situations as envisaged under Sub-sections(1) & (2) of Sec.2-A.
2) The object of Sec.2-A is to ensure that an employee does not loose his claim for gratuity by literal interpretation of the expression ‘continuous service’ as it is not possible for an employee to be literally in uninterrupted service for a given period (say five years for example) in view of the contingencies of human life which require him to abstain from duty for various reasons like illness etc or his services are terminated before he completes a spell of 12 months. Thus it adopts a liberal interpretation having regard to the spirit and objectives of a beneficial legislation like Gratuity Act.
3)Sec.2-A does no more than this. It does not say that an employee is eligible for gratuity. There is not even a whisper about eligibility in Sec.2-A. No employee can stake his eligibility under Sec 2-A. An employee asserts his eligibility under Sec.4(1) only.
4)Once an employee submits his application for gratuity with details of the period of service in the relevant columns, the employer initiates the process of computation of his service period. I would like to refer to the following sequence of steps that take place from the stage of submitting application for gratuity till the making of decision to grant his gratuity to corroborate the view that both Sections 4(1) and 2-A complement each other to be read conjointly.
i) First step : Employee submits his application for gratuity with details of the period of service in terms of Rule (7) under Sec.4(1).
ii) Second step : Once the application is submitted, the scene of action shifts to Sec.2-A as under.
On receipt of application, the employer proceeds to satisfy himself whether the employee has completed five years or more by verifying the date of his joining and the date of resignation or retirement or termination as the case may be. He will verify whether the period is interrupted by any periods of break-in-service or if interrupted, whether the interruptions are permissible under law to ensure that the period is continuous. Thus this whole exercise is undertaken by the employer falls within the purview of computation of continuous service under Sec.2-A. It is inevitable for the employer to conduct this exercise as this is concomitant t o ascertaining g his eligibility u/sec.4(1).
iii) Once he is satisfied that the employee was in continuous service for 5 years or more, the employer upholds his eligibility under Sec.4(1) and grants his gratuity.
Thus the above procedural exercise, in my view, abundantly substantiates that Sec.4(1) and Sec2-A are as inseparable as the Siamese twins and need to be read conjointly only.
5) If it is so, the benefits of fictional service of one year under subsection(2) of sec.2A need to be allowed to employees in deserving cases.
However when there is a query seeking to know what is the qualifying service to be eligible to claim gratuity, the proper reply can be five years of continuous service but not four years and eight months.
B.Saikumar
Mumbai
From India, Mumbai
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Dear Mr. Saikumar,
Thank you very much for your meticulous and plausible explanation of the contents of S.2A of the Act. I am in complete agreement with you, no doubt. The standoff arises only in the matter of reading together of Ss 2A and 4(1). Right from the outset, what I am consistently saying is that conjunctive reading of both the sections should not be resorted to in order to extract the meaning of the term 'continuous service' mentioned in S4(1) because of the qualifying phrase 'not less than five years' following it. We just have to allow its literal meaning of 'the time lapse of five calendar years' — that's all. On the contrary, the difference in the purpose and context of both the sections will certainly lead to confusion.
Once the employee becomes eligible by virtue of his completion of 5 years of service under the same employer without any break causing cessation of the employer-employee relationship, in case of his subsequent termination due to any reason other than death or disability due to accident or disease, the aid of S2A comes into operation to ascertain whether he is entitled to gratuity for every year of his continuous service including the threshold first five years.
With regards,
From India, Salem
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Thank you very much for your meticulous and plausible explanation of the contents of S.2A of the Act. I am in complete agreement with you, no doubt. The standoff arises only in the matter of reading together of Ss 2A and 4(1). Right from the outset, what I am consistently saying is that conjunctive reading of both the sections should not be resorted to in order to extract the meaning of the term 'continuous service' mentioned in S4(1) because of the qualifying phrase 'not less than five years' following it. We just have to allow its literal meaning of 'the time lapse of five calendar years' — that's all. On the contrary, the difference in the purpose and context of both the sections will certainly lead to confusion.
Once the employee becomes eligible by virtue of his completion of 5 years of service under the same employer without any break causing cessation of the employer-employee relationship, in case of his subsequent termination due to any reason other than death or disability due to accident or disease, the aid of S2A comes into operation to ascertain whether he is entitled to gratuity for every year of his continuous service including the threshold first five years.
With regards,
From India, Salem
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Dear Sir/Madam,
I worked in an organization for 5 years and 2 months. Now, due to some reasons, I have left the job. However, when I inquired with our employer, they informed me that gratuity is only applicable when the staff strength is 10 or more. If there are fewer than 10 employees, we are not eligible for gratuity payment.
Please advise if I am entitled to receive gratuity. The company is a private limited company.
Looking forward to your reply.
Regards,
Vikas Bhagat
From India, Delhi
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I worked in an organization for 5 years and 2 months. Now, due to some reasons, I have left the job. However, when I inquired with our employer, they informed me that gratuity is only applicable when the staff strength is 10 or more. If there are fewer than 10 employees, we are not eligible for gratuity payment.
Please advise if I am entitled to receive gratuity. The company is a private limited company.
Looking forward to your reply.
Regards,
Vikas Bhagat
From India, Delhi
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Dear Vikas ji,
It is not binding on your company to pay you Gratuity as per law if the employee strength of your company does not exceed 10 at any time. You can only request the company for the Gratuity. It is up to the company whether to accept your request or not.
You mentioned that the strength of your staff does not exceed 10. It is not just the strength of the staff alone.
WISH YOU GOOD LUCK!!!
From India, Mumbai
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It is not binding on your company to pay you Gratuity as per law if the employee strength of your company does not exceed 10 at any time. You can only request the company for the Gratuity. It is up to the company whether to accept your request or not.
You mentioned that the strength of your staff does not exceed 10. It is not just the strength of the staff alone.
WISH YOU GOOD LUCK!!!
From India, Mumbai
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I am very thankful to all for their insight on the topic and happy to be a member of this website where quality discussions take place. However, I have not received any response to my post on the joint venture format. Please, I need your help. Thanks again.
From India, Calcutta
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From India, Calcutta
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Provision of Gratuity Policy – Under Payment of Gratuity Act - 1972
Eligibility :
As a part of the statute and under the payment of Gratuity Act – 1972, all employees are eligible for gratuity. For payment of gratuity the effective period will be taken into calculation from employees’ date of joining.
Formula / Calculation basis :
For employees who have completed a total service of five years and above, gratuity will be calculated on last basic salary drawn divided by 26 multiplied by 15 and the whole amount to be multiplied by number of years service. (For this purpose 6 months and above can be rounded up to a full years service and less than 6 months need not be.)
For employees who have not completed a total five years of service, will be calculated on last basic salary drawn divided by 26 multiplied by 15 and the whole amount to be multiplied by number of year’s service. More than fifteen days working in a month will be considered for full month and less than fifteen days will not be considered for calculation. For e.g. an employee who has completed 3 years 3 months and 14 days of service, his / her gratuity will be paid for 3 years and 3 months (i.e. 3.25 years).
The booking of provision will be from the day employee joined the organisation and on monthly accumulation basis. (For booking of provision)
Payment :
Gratuity shall only be payable to an employee on employees separation from the company for any reason mentioned below on above basis.
a) On employees termination, or
b) On retirement or
c) On resignation, or
d) On death or disablement due to accident or disease:
This will be effective from 1st April 2009.
---------------------------
Dear Friends,
Want to know whether Gratuity is Payable for less than five years of service term (as mentioned above) or not, if yes, the how & why it is payable as I have not claimed from two organizations-
1)ING Life Insurance Co
2)Tata Teleservices
Have mentioned cos names because few of us must be knowing provisions about these two cos.
Please help me in getting Gratuity Payment if it is applicable.
Thanks all
From India, Pune
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Eligibility :
As a part of the statute and under the payment of Gratuity Act – 1972, all employees are eligible for gratuity. For payment of gratuity the effective period will be taken into calculation from employees’ date of joining.
Formula / Calculation basis :
For employees who have completed a total service of five years and above, gratuity will be calculated on last basic salary drawn divided by 26 multiplied by 15 and the whole amount to be multiplied by number of years service. (For this purpose 6 months and above can be rounded up to a full years service and less than 6 months need not be.)
For employees who have not completed a total five years of service, will be calculated on last basic salary drawn divided by 26 multiplied by 15 and the whole amount to be multiplied by number of year’s service. More than fifteen days working in a month will be considered for full month and less than fifteen days will not be considered for calculation. For e.g. an employee who has completed 3 years 3 months and 14 days of service, his / her gratuity will be paid for 3 years and 3 months (i.e. 3.25 years).
The booking of provision will be from the day employee joined the organisation and on monthly accumulation basis. (For booking of provision)
Payment :
Gratuity shall only be payable to an employee on employees separation from the company for any reason mentioned below on above basis.
a) On employees termination, or
b) On retirement or
c) On resignation, or
d) On death or disablement due to accident or disease:
This will be effective from 1st April 2009.
---------------------------
Dear Friends,
Want to know whether Gratuity is Payable for less than five years of service term (as mentioned above) or not, if yes, the how & why it is payable as I have not claimed from two organizations-
1)ING Life Insurance Co
2)Tata Teleservices
Have mentioned cos names because few of us must be knowing provisions about these two cos.
Please help me in getting Gratuity Payment if it is applicable.
Thanks all
From India, Pune
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Dear Sir,
I forgot to collect my gratuity from a company I left (resigned) in 2011 after 8 years and nine months, but the gratuity was paid/collected as shown in the company's records, which was not credited to any of my accounts. Now, the employer is not cooperating for reconciling as they say that the records have been destroyed and question why you have contacted them after so many years. Even my banker (Canara Bank) didn't provide extensive help, possibly due to their helplessness or for any other reason, to give me my or the company's account statement which could help me.
Please suggest how I can take corrective action.
Thanks all,
Amitabh
From India, Pune
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I forgot to collect my gratuity from a company I left (resigned) in 2011 after 8 years and nine months, but the gratuity was paid/collected as shown in the company's records, which was not credited to any of my accounts. Now, the employer is not cooperating for reconciling as they say that the records have been destroyed and question why you have contacted them after so many years. Even my banker (Canara Bank) didn't provide extensive help, possibly due to their helplessness or for any other reason, to give me my or the company's account statement which could help me.
Please suggest how I can take corrective action.
Thanks all,
Amitabh
From India, Pune
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Mr. Amitab,
I think your erstwhile employer and yourself are both from Pune. To get your gratuity pending, please take the following steps:
1) Prepare a notice in 'form I' in duplicate.
2) Send one copy to your erstwhile employer by registered post with acknowledgment due.
3) Retain the other copy of form I, POST OFFICE RECEIPT, and AD card received back.
4) After 15 days from the date of service of your notice, if a reply is received refuting your claim for gratuity or no reply is received from the employer, prepare an application for direction in form 'N' in triplicate and submit in duplicate to the Controlling Authority for your area with the copy of form I, AD card, and any reply received from your employer.
5) Also, present an application for condonation of delay. It would be advisable to engage a Counsel for this process.
Please let me know if you need any further assistance.
Regards, [Your Name]
From India, Salem
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I think your erstwhile employer and yourself are both from Pune. To get your gratuity pending, please take the following steps:
1) Prepare a notice in 'form I' in duplicate.
2) Send one copy to your erstwhile employer by registered post with acknowledgment due.
3) Retain the other copy of form I, POST OFFICE RECEIPT, and AD card received back.
4) After 15 days from the date of service of your notice, if a reply is received refuting your claim for gratuity or no reply is received from the employer, prepare an application for direction in form 'N' in triplicate and submit in duplicate to the Controlling Authority for your area with the copy of form I, AD card, and any reply received from your employer.
5) Also, present an application for condonation of delay. It would be advisable to engage a Counsel for this process.
Please let me know if you need any further assistance.
Regards, [Your Name]
From India, Salem
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Dear All,
Jurisprudence is about interpreting the provisions of law in such a way that they seem just and fair. As I already mentioned, and strongly believe, that when interpreting any beneficial legislation, we should give the provisions the most liberal interpretation possible so that it favors employees and does not lead to injustice for employers.
I am uploading a judgment of the Madras High Court wherein Learned Justice S.M. Abdul Wahab has given a well-reasoned judgment on the question of entitlement to gratuity.
I would like to request the worthy members of the community to go through the judgment and examine the logic provided by the Learned Justice without delving into the technicalities of territorial jurisdiction.
From India, New Delhi
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Jurisprudence is about interpreting the provisions of law in such a way that they seem just and fair. As I already mentioned, and strongly believe, that when interpreting any beneficial legislation, we should give the provisions the most liberal interpretation possible so that it favors employees and does not lead to injustice for employers.
I am uploading a judgment of the Madras High Court wherein Learned Justice S.M. Abdul Wahab has given a well-reasoned judgment on the question of entitlement to gratuity.
I would like to request the worthy members of the community to go through the judgment and examine the logic provided by the Learned Justice without delving into the technicalities of territorial jurisdiction.
From India, New Delhi
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Dear All,
Can anybody share the Minimum Wages Rates (Change in DA) Circular for the Maharashtra region effective from 1st July 2013? To my knowledge, there has been an increase of 188.60, but I have not received the circular as proof from my security service provider.
From India, Pune
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Can anybody share the Minimum Wages Rates (Change in DA) Circular for the Maharashtra region effective from 1st July 2013? To my knowledge, there has been an increase of 188.60, but I have not received the circular as proof from my security service provider.
From India, Pune
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