Dear Amit,
Gratuity act says that in the last year of service if the employee has worked for more than 6 months then it will be treated as one full year. Its clear that 7 months has 210 days. So, in his last year he is not working for 240 days but he will be given gratuity for that year.
In calculation of gratuity, the formulais 15 days average salary for every completed year of service.
Moreover, "completed year of service" means continuous service year of one year.
Hence, in your case, If in the last year he has worked for more that 6 months he will get gratuity for same, but for the penultimate year it has to be seen with reference to section 2D of the act whether the employee has worked for 240 days or not.
If he has worked for more than 240 days it will be termed as completed year of service else not.
Comments from others will be appriciated.
Regards,
Nilendra
18Gratuity act says that in the last year of service if the employee has worked for more than 6 months then it will be treated as one full year. Its clear that 7 months has 210 days. So, in his last year he is not working for 240 days but he will be given gratuity for that year.
In calculation of gratuity, the formulais 15 days average salary for every completed year of service.
Moreover, "completed year of service" means continuous service year of one year.
Hence, in your case, If in the last year he has worked for more that 6 months he will get gratuity for same, but for the penultimate year it has to be seen with reference to section 2D of the act whether the employee has worked for 240 days or not.
If he has worked for more than 240 days it will be termed as completed year of service else not.
Comments from others will be appriciated.
Regards,
Nilendra
Hi Nilendra,
ya, u r right. (Gratuity act says that in the last year of service if the employee has worked for more than 6 months then it will be treated as one full year).
thanks every one for giving your views. it is a nice feeling being in cite HR :) :) :) :) :)
Anita.
From India, Bangalore
ya, u r right. (Gratuity act says that in the last year of service if the employee has worked for more than 6 months then it will be treated as one full year).
thanks every one for giving your views. it is a nice feeling being in cite HR :) :) :) :) :)
Anita.
From India, Bangalore
Yes Sowmya,
According to Gratuity Act Section 4, Insurance has to be obtained for payment towards gratuity from LIC or any other prescribed insurer or have an approved gratuity fund. The premium is annual in nature(If premium can be monthly, pl let me know).
Regards,
Nilendra
According to Gratuity Act Section 4, Insurance has to be obtained for payment towards gratuity from LIC or any other prescribed insurer or have an approved gratuity fund. The premium is annual in nature(If premium can be monthly, pl let me know).
Regards,
Nilendra
Dear Vipin,
pl find the relevant portion of the act:
4A. COMPULSORY INSURANCE. - (1) With effect from such date as may be notified by the appropriate Government in this behalf, every employer, other than an employer or an establishment belonging to, or under the control of, the Central Government or a State Government, shall, subject to the provisions of sub-section (2), obtain an insurance in the manner prescribed, for his liability for payment towards the gratuity under this Act, from the Life Insurance Corporation of India established under the Life Insurance Corporation of India Act, 1956 (31 of 1956) or any other prescribed insurer : Provided that different dates may be appointed for different establishments or class of establishments or for different areas.
(2) The appropriate Government may, subject to such conditions as may be prescribed, exempt every employer who had already established an approved gratuity fund in respect of his employees and who desires to continue such arrangement, and every employer employing five hundred or more persons who establishes an approved gratuity fund in the manner prescribed from the provisions of sub-section (1).
(3) For the purpose of effectively implementing the provisions of this section, every employer shall within such time as may be prescribed get his establishment registered with the controlling authority in the prescribed manner and no employer shall be registered under the provisions of this section unless he has taken an insurance referred to in sub-section (1) or has established an approved gratuity fund referred to in sub-section (2).
(4) The appropriate Government may, by notification, make rules to give effect to the provisions of this section and such rules may provide for the composition of the Board of Trustees of the approved gratuity fund and for the recovery by the controlling authority of the amount of the gratuity payable to an employee from the Life Insurance Corporation of India or any other insurer with whom an insurance has been taken under sub-section (1), or as the case may be, the Board of Trustees of the approved gratuity fund.
(5) Where an employer fails to make any payment by way of premium to the insurance referred to in sub-section (1) or by way of contribution to an approved gratuity fund referred to in sub-section (2), he shall be liable to pay the amount of gratuity due under this Act (including interest, if any, for delayed payments) forthwith to the controlling authority.
(6) Whoever contravenes the provisions of sub-section (5) shall be punishable with fine which may extend to ten thousand rupees and in the case of a continuing offence with a further fine which may extend to one thousand rupees for each day during which the offence continues.
Explanation : In this section "approved gratuity fund" shall have the same meaning as in clause (5) of section 2 of the Income-tax Act, 1961 (43 of 1961).
Regards,
Nilendra
pl find the relevant portion of the act:
4A. COMPULSORY INSURANCE. - (1) With effect from such date as may be notified by the appropriate Government in this behalf, every employer, other than an employer or an establishment belonging to, or under the control of, the Central Government or a State Government, shall, subject to the provisions of sub-section (2), obtain an insurance in the manner prescribed, for his liability for payment towards the gratuity under this Act, from the Life Insurance Corporation of India established under the Life Insurance Corporation of India Act, 1956 (31 of 1956) or any other prescribed insurer : Provided that different dates may be appointed for different establishments or class of establishments or for different areas.
(2) The appropriate Government may, subject to such conditions as may be prescribed, exempt every employer who had already established an approved gratuity fund in respect of his employees and who desires to continue such arrangement, and every employer employing five hundred or more persons who establishes an approved gratuity fund in the manner prescribed from the provisions of sub-section (1).
(3) For the purpose of effectively implementing the provisions of this section, every employer shall within such time as may be prescribed get his establishment registered with the controlling authority in the prescribed manner and no employer shall be registered under the provisions of this section unless he has taken an insurance referred to in sub-section (1) or has established an approved gratuity fund referred to in sub-section (2).
(4) The appropriate Government may, by notification, make rules to give effect to the provisions of this section and such rules may provide for the composition of the Board of Trustees of the approved gratuity fund and for the recovery by the controlling authority of the amount of the gratuity payable to an employee from the Life Insurance Corporation of India or any other insurer with whom an insurance has been taken under sub-section (1), or as the case may be, the Board of Trustees of the approved gratuity fund.
(5) Where an employer fails to make any payment by way of premium to the insurance referred to in sub-section (1) or by way of contribution to an approved gratuity fund referred to in sub-section (2), he shall be liable to pay the amount of gratuity due under this Act (including interest, if any, for delayed payments) forthwith to the controlling authority.
(6) Whoever contravenes the provisions of sub-section (5) shall be punishable with fine which may extend to ten thousand rupees and in the case of a continuing offence with a further fine which may extend to one thousand rupees for each day during which the offence continues.
Explanation : In this section "approved gratuity fund" shall have the same meaning as in clause (5) of section 2 of the Income-tax Act, 1961 (43 of 1961).
Regards,
Nilendra
Dear Ms Anitha :
In addition to Ms Trisha's comments indicating gratuity payable after 5 yrs on termination/retirement, etc, I think in case of death of an employee during service, the condition of completion of 5 yrs does not arise.
Rgds
:: Dhinakaran
From India, Hyderabad
In addition to Ms Trisha's comments indicating gratuity payable after 5 yrs on termination/retirement, etc, I think in case of death of an employee during service, the condition of completion of 5 yrs does not arise.
Rgds
:: Dhinakaran
From India, Hyderabad
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