I don't know what Mr. Manish wants to convey. Full and Final Service and Continuous service - are they in any way related? An employee who does not have continuous service is also eligible for F&F. F&F only means the settlement of his unpaid salary, travel bills, etc., and it has nothing to do with continuous service. Therefore, after accepting the F&F, if he files a complaint before the appropriate authority for the recovery of gratuity (I think the matter is related to the payment of gratuity), then the employer cannot say that he has already accepted the full and final settlement and he cannot raise the issue again. This is because the payment of gratuity is the responsibility of the employer, and even if the employee has not demanded it, if he is eligible, the employer has the obligation to contact the left employee and pay the gratuity amount to him.
Let me take it like F&F on the expiry of each contract. So what? F&F only reflects the settlement of dues other than gratuity. For the purpose of gratuity, the service at each spell will be counted, and if each year has 240 days of working, he should get gratuity even if he has signed F&F at the end of each service contract period.
From India, Kannur
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4479Let me take it like F&F on the expiry of each contract. So what? F&F only reflects the settlement of dues other than gratuity. For the purpose of gratuity, the service at each spell will be counted, and if each year has 240 days of working, he should get gratuity even if he has signed F&F at the end of each service contract period.
From India, Kannur
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Madhu ji, the employee has not completed 5 years in one term (let's say 4.1 years). The employee has taken Full and Final settlement and accepted the same, then left the company. The employer called him back after a one or two-month gap. After accepting the Full and Final settlement, how can the employee claim gratuity if they have not completed 5 years?
The employer could argue that since the employee accepted the Full and Final settlement and did not complete 5 years, they are not eligible for gratuity based on the definition of "Continuous service." This is why I asked.
Thank you.
From India, Delhi
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The employer could argue that since the employee accepted the Full and Final settlement and did not complete 5 years, they are not eligible for gratuity based on the definition of "Continuous service." This is why I asked.
Thank you.
From India, Delhi
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This is reemployment and not merely a break in service. Obviously, in such cases, the gratuity will not be payable. But if the operational system itself dictates that a person will be hired for one year and after that, he is asked to stay away for a month before being asked to rejoin, then the gap will be considered artificial.
From India, Kannur
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From India, Kannur
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(Fact Checked)-The user reply is accurate. The concept of reemployment in this scenario where the gap between contracts is artificial does not break the continuous service for gratuity eligibility. (1 Acknowledge point)
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The information you have posted is very useful. The sites you have referred to were good. Thanks for sharing.
Shell Shockers
From Vietnam, Hanoi
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Shell Shockers
From Vietnam, Hanoi
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Dear All,
I have gone through the whole thread and realized that the emphasis of the worth members is on "break in service". Please understand that as per gratuity act "break in service" is allowed with certain terms. To make it further clear we have to look into the definition of "Continuous Service" in the Act:-
2A. Continuous Service.- (1) For the purpose of this Act-
(1) An employee shall be said to be in continuous service for a period if he has, for that period, been in uninterrupted service, including service which may be interrupted on account of sickness, accident, leave, absence from duty without leave (not being absence in respect of which an order treating the absence as break in service has been passed in accordance with the standing orders, rules or regulations governing the employees of the establishment), lay-off, strike or a lock-out or cessation of work not due to any fault of the employee, whether such uninterrupted or interrupted service was rendered before or after the commencement of this Act;
(2) Where an employee (not being an employee employed in a seasonal establishment) is not in continuous service within the meaning of clause (1), for any period of one year or six months, he shall be deemed to be in continuous service under the employer-
(a) for the said period of one year, if the employee during the period of twelve calendar months preceding the date with reference to which calculation is to be made, has actually worked under the employer for not less than-
(i) one hundred and ninety days, in the case of an employee employed below the ground in a mine or in an establishment which works for less than six days in a week; and
(ii) two hundred and forty days, in any other case:
(b) for the said period of six months if the employee during the period of six calendar months preceding the date with reference to which the calculation is to be made, has actually worked under the employer for not less than-
(i) ninety-five days, in the case of an employee employed below the ground in a mine or in an establishment which works for less than six days in a week; and
(ii) one hundred and twenty days, in any other case;
1[Explanation.- For the purpose of clause (2), the number of days on which an employee has actually worked under an employer shall include the days on which-
(i) he has been laid-off under an agreement or as permitted by standing orders made under the Industrial Employment (Standing Orders) Act, 1946 (20 of 1946), or under the Industrial Disputes Act, 1947 (14 of 1947), or under any other law applicable to the establishment;
(ii) he has been on leave with full wages, earned in the previous year;
(iii) he has been absent due to temporary disablement caused by
accident arising out of and in the course of his employment; and
(iv) in the case of a female, she has been on maternity leave; so,
however, that the total period of such maternity leave does not
exceed twelve weeks].
(3) Where an employee, employed in a seasonal establishment, is not in continuous service within the meaning of clause (1), for any period of one year or six months, he shall be deemed to be in continuous service under the employer for such period 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 such period.]
Now lets come to the issue at hand. If the person has taken full and final each year and again engaged right after a few days (be it 1 month or even 2 for that matter) then it may be argued that it is being done to evade the otherwise due applicability of gratuity payment to that employee. Please note he has to show that he worked only for 240 days in each year of service for 5 years, which as per you he did. Untill there is a gap of a full year between those 5 years you cannot say that his services were not continuous. Also untill his full and final consists of Payment of Gratuity as well, you cannot deprive the employee of his statutory right of gratuity and that reminds me of a cardinal and very important principal of legal jurisprudence that what cannot be done directly cannot be done indirectly either. You cannot deprive someone of their statutory right. A statutory right cannot be given away by even signing any contract. There is a protection under Law against it. Also the person follows the rules of your school he is an employee and covered under the definition of employee as given below:-
2 (e) “employee” means any person (other than an apprentice) who is employed for wages, whether the terms of such employment are
express or implied, in any kind of work, manual or otherwise, in
or in connection with the work of a factory, mine, oilfield, plantation, port, railway company, shop or other establishment
to which this Act applies, but does not include any such person
who holds a post under the Central Government or a State Government and is governed by any other Act or by any rules
providing for payment of gratuity;
As per the definition which is very wide any person employed for wages is entitled to get the Gratuity. Hence it would be advisable to pay him gratuity.
From India, New Delhi
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I have gone through the whole thread and realized that the emphasis of the worth members is on "break in service". Please understand that as per gratuity act "break in service" is allowed with certain terms. To make it further clear we have to look into the definition of "Continuous Service" in the Act:-
2A. Continuous Service.- (1) For the purpose of this Act-
(1) An employee shall be said to be in continuous service for a period if he has, for that period, been in uninterrupted service, including service which may be interrupted on account of sickness, accident, leave, absence from duty without leave (not being absence in respect of which an order treating the absence as break in service has been passed in accordance with the standing orders, rules or regulations governing the employees of the establishment), lay-off, strike or a lock-out or cessation of work not due to any fault of the employee, whether such uninterrupted or interrupted service was rendered before or after the commencement of this Act;
(2) Where an employee (not being an employee employed in a seasonal establishment) is not in continuous service within the meaning of clause (1), for any period of one year or six months, he shall be deemed to be in continuous service under the employer-
(a) for the said period of one year, if the employee during the period of twelve calendar months preceding the date with reference to which calculation is to be made, has actually worked under the employer for not less than-
(i) one hundred and ninety days, in the case of an employee employed below the ground in a mine or in an establishment which works for less than six days in a week; and
(ii) two hundred and forty days, in any other case:
(b) for the said period of six months if the employee during the period of six calendar months preceding the date with reference to which the calculation is to be made, has actually worked under the employer for not less than-
(i) ninety-five days, in the case of an employee employed below the ground in a mine or in an establishment which works for less than six days in a week; and
(ii) one hundred and twenty days, in any other case;
1[Explanation.- For the purpose of clause (2), the number of days on which an employee has actually worked under an employer shall include the days on which-
(i) he has been laid-off under an agreement or as permitted by standing orders made under the Industrial Employment (Standing Orders) Act, 1946 (20 of 1946), or under the Industrial Disputes Act, 1947 (14 of 1947), or under any other law applicable to the establishment;
(ii) he has been on leave with full wages, earned in the previous year;
(iii) he has been absent due to temporary disablement caused by
accident arising out of and in the course of his employment; and
(iv) in the case of a female, she has been on maternity leave; so,
however, that the total period of such maternity leave does not
exceed twelve weeks].
(3) Where an employee, employed in a seasonal establishment, is not in continuous service within the meaning of clause (1), for any period of one year or six months, he shall be deemed to be in continuous service under the employer for such period 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 such period.]
Now lets come to the issue at hand. If the person has taken full and final each year and again engaged right after a few days (be it 1 month or even 2 for that matter) then it may be argued that it is being done to evade the otherwise due applicability of gratuity payment to that employee. Please note he has to show that he worked only for 240 days in each year of service for 5 years, which as per you he did. Untill there is a gap of a full year between those 5 years you cannot say that his services were not continuous. Also untill his full and final consists of Payment of Gratuity as well, you cannot deprive the employee of his statutory right of gratuity and that reminds me of a cardinal and very important principal of legal jurisprudence that what cannot be done directly cannot be done indirectly either. You cannot deprive someone of their statutory right. A statutory right cannot be given away by even signing any contract. There is a protection under Law against it. Also the person follows the rules of your school he is an employee and covered under the definition of employee as given below:-
2 (e) “employee” means any person (other than an apprentice) who is employed for wages, whether the terms of such employment are
express or implied, in any kind of work, manual or otherwise, in
or in connection with the work of a factory, mine, oilfield, plantation, port, railway company, shop or other establishment
to which this Act applies, but does not include any such person
who holds a post under the Central Government or a State Government and is governed by any other Act or by any rules
providing for payment of gratuity;
As per the definition which is very wide any person employed for wages is entitled to get the Gratuity. Hence it would be advisable to pay him gratuity.
From India, New Delhi
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(Fact Checked)-The user reply is correct based on the definition of continuous service provided in the Payment of Gratuity Act. The employee would be eligible for gratuity if the service is continuous for 5 years, even with a gap of 1 month between contracts. (1 Acknowledge point)
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Judgment of the 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)], states that if any person worked 240 days in a year, that will be assumed as a whole year. As the definition of continuous service in the Industrial Dispute Act and Payment of Gratuity Act are the same, the same principle can be adopted under the act. Hence, an employee rendering service of 4 years, 10 months, and 11 days is considered to have completed 5 years of continuous service under sec.4(2), making them eligible for gratuity.
From India, Ghaziabad
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From India, Ghaziabad
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(Fact Checked)-The user reply is correct based on the Supreme Court judgement in Surendra Kumar Verma vs. Central Govt. Industrial Tribunal, [(1980) (4) S.C.C.433)]. The interpretation of continuous service aligns with both the Industrial Dispute Act and the Payment of Gratuity Act. (1 Acknowledge point)
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If a contract employee is hired for a year and the contract is terminated after a year, and the same employee is hired again after a month and placed in the services of the same principal employer. This pattern of employment continues for 5 years (5 years of contract service with an intermittent gap of one month between each year and the extended year). The contract employee will be eligible for gratuity if the contract employee quits the service after 5 years or if the contractor terminates their service after 5 years.
From India, Chennai
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From India, Chennai
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(Fact Checked)-The user's reply is correct regarding gratuity eligibility for a contract employee with continuous service of 5 years, including a one-month gap between contracts. (1 Acknowledge point)
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confutation to previous post Rationale : The contract employer is deemed to have continued on those days of gap/break during the stretch of 5 years . senprithvib6
From India, Chennai
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From India, Chennai
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What is a break in service with regard to the payment of the gratuity act? Assuming an employee who joined the service of an employer on 01.01.2015 and resigns from his job and gets relieved on 31.12.2019. During his tenure, he had unauthorized absences from work for not less than an average of 150 days every year (i.e., years 01.01.2015 to 31.12.2015, 01.01.2016 to 31.12.2016, 01.01.2017 to 31.12.2017, 01.01.2018 to 31.12.2018, and 01.01.2019 to 31.12.2019). In this case, he would have attended 210 days per year as against 240 days as contemplated under the Payment of Gratuity Act to constitute "continuous service" for being eligible for gratuity each year.
However, if the employee goes scot-free in as much as the employer simply chooses to condone/warn his absence for each spell of absence, he is eligible for gratuity.
Rationale:
Unless the employee is issued an order to the effect that the days of absence of each spell have been treated as a break in service/service interrupted and thus declare that he has not put in continuous service as per the statute, he is eligible for gratuity on completion of 5 years. Again, before passing such an order, the employer should have an enabling provision either in the certified standing orders applicable to employees or from the long-term settlement if any. This provision should be quoted in the written order being issued to the concerned employee. You are obliged to prove that the employee had unauthorizedly absented from work for such spells as pointed out in the orders should a demand arise from the concerned employee.
Senprithvib6
From India, Chennai
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However, if the employee goes scot-free in as much as the employer simply chooses to condone/warn his absence for each spell of absence, he is eligible for gratuity.
Rationale:
Unless the employee is issued an order to the effect that the days of absence of each spell have been treated as a break in service/service interrupted and thus declare that he has not put in continuous service as per the statute, he is eligible for gratuity on completion of 5 years. Again, before passing such an order, the employer should have an enabling provision either in the certified standing orders applicable to employees or from the long-term settlement if any. This provision should be quoted in the written order being issued to the concerned employee. You are obliged to prove that the employee had unauthorizedly absented from work for such spells as pointed out in the orders should a demand arise from the concerned employee.
Senprithvib6
From India, Chennai
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Amount of gratuity is directly proportional to the tenure of service and also to the last drawn salary. The gratuity is given at the rate of 15 days of the last drawn salary for each year of service. The salary considered for the calculation of gratuity is the last drawn salary, which includes basic pay and dearness allowance. It is typically calculated according to this formula: Last drawn salary (basic salary plus dearness allowance) multiplied by the number of completed years of service multiplied by 15/26. According to this formula, a time period of over six months or more is considered as one year. This means if you have completed five years and seven months of service, the number of years considered would be six years for the calculation of gratuity benefit. On the other hand, if the service period is five years and five months, the gratuity calculation will be considered as five years.
From India, Aizawl
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From India, Aizawl
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(Fact Checked)-The user's reply is [B]correct[/B] in explaining the calculation of gratuity based on the last drawn salary and the completed years of service. No amendments are needed. (1 Acknowledge point)
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(Fact Checked)-The employee can be eligible for gratuity if the gap between contracts doesn't exceed 1 month. Acceptance of F&F doesn't impact gratuity eligibility. Thank you for seeking clarification on this matter. (1 Acknowledge point)