Hi Mercury and other friends,
Pardon me for missing one more point here-
Section 4(2) of the PG Act says:
"... that for every completed year of service in excess of six months, the employer shall pay gratuity to an employee. That means if an employee works in the establishment for more than 6 months in a year, he shall be eligible to get gratuity at the prescribed rate."
The extract of this section is reproduced here:
xxxx
4. Payment of gratuity.
4. Payment of gratuity.- (1) Gratuity shall be payable to an employee on the termination of his employment after he has rendered continuous service for not less than five years,--
(a) on his superannuation, or
(b) on his retirement or resignation, or
(c) on his death or disablement due to an accident or disease:
Provided that the completion of continuous service of five years shall not be necessary where the termination of the employment of any employee is due to death or disablement:
4*[Provided further that in the case of death of the employee, gratuity payable to him shall be paid to his nominee or, if no nomination has been made, to his heirs, and where any such nominees or heirs are minors, the share of such minors shall be deposited with the controlling authority who shall invest the same for the benefit of such minors in such a bank or other financial institution, as may be prescribed, until such minors attain majority.]
Explanation: For the purposes of this section, disablement means such disablement as incapacitates an employee from the work which he was capable of performing before the accident or disease resulting in such disablement.
(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: Provided that in the case of a piece-rated employee, daily wages shall be computed on the average of the total wages received by him for a period of three months immediately preceding the termination of his employment, and, for this purpose, the wages paid for any overtime work shall not be taken into account:
Provided further that in the case of 1*["an employee who is employed in a seasonal establishment and who is not so employed throughout the year"], the employer shall pay the gratuity at the rate of seven days' wages for each season.
xxxxxxxx
I hope you would have completed 6 months of service; can you please check on this aspect and find out whether you got it right?
Also, read more when discussed on rounding of 6 months of service to one year earlier also in this link:
https://www.citehr.com/462940-paymen...-7-months.html
From India, Bangalore
Acknowledge(0)
Amend(0)
1273Pardon me for missing one more point here-
Section 4(2) of the PG Act says:
"... that for every completed year of service in excess of six months, the employer shall pay gratuity to an employee. That means if an employee works in the establishment for more than 6 months in a year, he shall be eligible to get gratuity at the prescribed rate."
The extract of this section is reproduced here:
xxxx
4. Payment of gratuity.
4. Payment of gratuity.- (1) Gratuity shall be payable to an employee on the termination of his employment after he has rendered continuous service for not less than five years,--
(a) on his superannuation, or
(b) on his retirement or resignation, or
(c) on his death or disablement due to an accident or disease:
Provided that the completion of continuous service of five years shall not be necessary where the termination of the employment of any employee is due to death or disablement:
4*[Provided further that in the case of death of the employee, gratuity payable to him shall be paid to his nominee or, if no nomination has been made, to his heirs, and where any such nominees or heirs are minors, the share of such minors shall be deposited with the controlling authority who shall invest the same for the benefit of such minors in such a bank or other financial institution, as may be prescribed, until such minors attain majority.]
Explanation: For the purposes of this section, disablement means such disablement as incapacitates an employee from the work which he was capable of performing before the accident or disease resulting in such disablement.
(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: Provided that in the case of a piece-rated employee, daily wages shall be computed on the average of the total wages received by him for a period of three months immediately preceding the termination of his employment, and, for this purpose, the wages paid for any overtime work shall not be taken into account:
Provided further that in the case of 1*["an employee who is employed in a seasonal establishment and who is not so employed throughout the year"], the employer shall pay the gratuity at the rate of seven days' wages for each season.
xxxxxxxx
I hope you would have completed 6 months of service; can you please check on this aspect and find out whether you got it right?
Also, read more when discussed on rounding of 6 months of service to one year earlier also in this link:
https://www.citehr.com/462940-paymen...-7-months.html
From India, Bangalore
Acknowledge(0)Amend(0)
Dear All,
I have gone through the views of everyone on the issue and have also gone through the judgment of Madras H.C. With due respect to the judgment of Madras and Kerala High Courts, it is submitted that if 240 days is the day’s work to be put in over a period of 12 months in order to make the service continuous and uninterrupted, then there is no logic to have the qualifying period of 5 years for entitlement of gratuity and further why only in the 5th year it should be 240 days and not in all the years from 1st year to 5th year. If that is the ratio then every employee who completes 240 days in each of the year on wards i.e. from 1st year to 5th year should be entitled to gratuity. This according to me could never have been the intention of the legislature because if that had been the intention, there was no need to have the sentence “he has rendered continuous service for not less than five years” in Section 4(1) of the Act.
I had written an article on the issue which was published in 2019 (160) FLR Journal Section Page 90 on wards. For ready reference, the same is attached herewith.
Thanks
S.SENSHARMA
From India, undefined
Acknowledge(0)Amend(0)
I have gone through the views of everyone on the issue and have also gone through the judgment of Madras H.C. With due respect to the judgment of Madras and Kerala High Courts, it is submitted that if 240 days is the day’s work to be put in over a period of 12 months in order to make the service continuous and uninterrupted, then there is no logic to have the qualifying period of 5 years for entitlement of gratuity and further why only in the 5th year it should be 240 days and not in all the years from 1st year to 5th year. If that is the ratio then every employee who completes 240 days in each of the year on wards i.e. from 1st year to 5th year should be entitled to gratuity. This according to me could never have been the intention of the legislature because if that had been the intention, there was no need to have the sentence “he has rendered continuous service for not less than five years” in Section 4(1) of the Act.
I had written an article on the issue which was published in 2019 (160) FLR Journal Section Page 90 on wards. For ready reference, the same is attached herewith.
Thanks
S.SENSHARMA
From India, undefined
Acknowledge(0)Amend(0)
Thank you, Mr. Sensharma, for your inputs. Good work, keep it up.
However, I am constrained to say that I/we have no locus standi to interpret the law or debate the intentions or lack of intentions of the legislature as it is unlikely to provide any help or solutions to the seekers.
I believe this platform serves the purpose of sharing available information through search and source to help the needy. In the process, we come to know many things of jurisprudence, limited to sharing our suggestions and ideas. I am of the opinion that I/we cannot sit in judgment or give directions without risk and cost. Therefore, I feel that I/we shall have no role in decision-making on any matter, as I/we should not mislead anyone, even by mistake, with my/our purported notions or give false hopes or deny help when it is sought. With this in mind, I restrict myself to sharing the documents and information I could reach and refrain from responding to anyone's opinions expressed here, whether they align with my thinking or not. I would prefer to leave them for the readers to assess. Members may agree or may not.
From India, Bangalore
Acknowledge(0)Amend(0)
However, I am constrained to say that I/we have no locus standi to interpret the law or debate the intentions or lack of intentions of the legislature as it is unlikely to provide any help or solutions to the seekers.
I believe this platform serves the purpose of sharing available information through search and source to help the needy. In the process, we come to know many things of jurisprudence, limited to sharing our suggestions and ideas. I am of the opinion that I/we cannot sit in judgment or give directions without risk and cost. Therefore, I feel that I/we shall have no role in decision-making on any matter, as I/we should not mislead anyone, even by mistake, with my/our purported notions or give false hopes or deny help when it is sought. With this in mind, I restrict myself to sharing the documents and information I could reach and refrain from responding to anyone's opinions expressed here, whether they align with my thinking or not. I would prefer to leave them for the readers to assess. Members may agree or may not.
From India, Bangalore
Acknowledge(0)Amend(0)Engage with peers to discuss and resolve work and business challenges collaboratively - share and document your knowledge. Our AI-powered platform, features real-time fact-checking, peer reviews, and an extensive historical knowledge base. - Join & Be Part Of Our Community.
Less than 5 years service - Eligibility for payment of gratuity.pdf