I've an question in my Mind about the gratuity that is, if a worker join my organisation on the date of 1st January, 2018 but he met an death on the date of 31st march, 2018. So in this condition will he eligible for the Gratuity amount..??
From India, Ahmedabad
8From India, Ahmedabad
Not at all . He has to work one year/ 240 days continuous service, than in a death case he would be eligible for Gratuity
From India, Madras
From India, Madras
Gratuity is a statutory terminal benefit of employment available to an employee on his superannuation or retirement or resignation or on his death or disablement due to accident or disease for a blemishless and long duration of not less than 5 years of continuous service as per the provisions of sec.4 of the Payment of Gratuity Act,1972.. However, in the cases of death or disablement due to accident or disease, the first proviso to ss (1) of Sec.4 categorically states that the minimum qualifying service is not required and as such the implication in this regard is that the gratuity has to be calculated based on the actual service rendered by the employee on the date of his death or disablement as per the formula set down u/s 4(2) of the Act. The formula for computation of gratuity revolves around the factors of the no. of completed years of service and the last drawn wages only. Thus eligibility for gratuity generally arises from the nature of termination of employment whereas entitlement to gratuity arises particularly from the no. of completed years of service. In the given example, though the nature of termination of employment i.e., "death" while in service makes the employee "eligible" for gratuity, the actual service rendered by him being only 3 months i.e., less than a year in the establishment, strictly speaking, takes away his "entitlement" to gratuity. That's why the Central as well as various State Rules of Gratuity prescribes the submission of nomination form for gratuity by the employee who completes one year of service in the same establishment. If the poster's magnanimity compels him, he can treat the 3 months service as one year, compute the gratuity as per the formula and pay to the deceased's family with some ex-gratia.
From India, Salem
From India, Salem
There are several organisations (many PSUs like BHEL) which have a voluntary welfare facility of giving three months salary in the event of death while in service before completion of five years service as gratuity. This is entirely within the discretion of employer to provide any such amount before completion of 240 days of service, as is in this case.
From India, Mumbai
From India, Mumbai
In continuation of the discussion on the trend indicated by Mr.KKHR, I am given to understand that the LIC has floated a special gratuity insurance policy with life cover till the date of retirement of the insured employees so as to enable to get full gratuity payable on the predetermined date of normal retirement though in the event of death of the insured employees any time before the date of actual retirement. Those members who have taken such a special gratuity insurance policy may kindly share the details for the benefit of others.
From India, Salem
From India, Salem
Dear Learned Members,
All discussion on Gratuity revolves around the issue whether an employee has served 5 years or not with the employer.
In current scenario, it is very common for an employee to switch jobs before the 5 year period. Over a career of 20 or more years, may employees may have switched many jobs thus denying him the benefit of gratuity with each individual employer. The employee ends up with no gratuity benefit even after working so many years.
Is there any mechanism whereby this accrued benefit can be transferred to the next employer so that at the end of an employees working life, he gets some benefit of a long career? Just Thinking aloud!
From India, Kochi
All discussion on Gratuity revolves around the issue whether an employee has served 5 years or not with the employer.
In current scenario, it is very common for an employee to switch jobs before the 5 year period. Over a career of 20 or more years, may employees may have switched many jobs thus denying him the benefit of gratuity with each individual employer. The employee ends up with no gratuity benefit even after working so many years.
Is there any mechanism whereby this accrued benefit can be transferred to the next employer so that at the end of an employees working life, he gets some benefit of a long career? Just Thinking aloud!
From India, Kochi
I would like to comment on Mr. Umakantan's observation, you are correct regarding the LIC coverage. If the company has taken a LIC coverage for their gratuity fund, then the deceased employee's nominee in question would have got his gratuity amount till his actual date of retirement irrespective of number of years he has served in the organisation.
From India, Mumbai
From India, Mumbai
Further to the posts of Mr. Umakanthan & Mr. Shashikumar Nair, I would like to add that my organisation is presently in the process of renewal of LIC Group Gratuity Cash Accumulation Plan. In the renewal notice LIC has intimated that default quote will be generated based on:-
a) Upward revision of Gratuity from 10L to 20L.
b) Life Cover of Rs. 20L.
The company has following options for renewal:-
a) Reduce gratuity ceiling for LIC Policy below 20L with an undertaking that any shortfall in gratuity benefit will be fullfilled by the company.
b) Limit the Life cover to any desired amount less than 20L (again with a signed letter by the company)
From the post of Mr. Sashikumar Nair, I understand that the life cover is basically to ensure gratuity payout to the beneficiaries in case of death of the employee, even if he is not eligible for gratuity (less than 5years service). Am I right?
What will be the payout from LIC GGCA Plan in case the employee dies after serving more than 5 years (eligible for gratuity)? Will his nominee get the gratuity due to him as on the date of his death PLUS the life insurance cover? or will it be ONLY gratuity amount due to him as if he had retired on due date?
I have asked these clarifications from LIC but am yet to get a reply, I shall update this post as and when I get a reply. However, members may please advice based on their own experience.
Thanks
From India, Kochi
a) Upward revision of Gratuity from 10L to 20L.
b) Life Cover of Rs. 20L.
The company has following options for renewal:-
a) Reduce gratuity ceiling for LIC Policy below 20L with an undertaking that any shortfall in gratuity benefit will be fullfilled by the company.
b) Limit the Life cover to any desired amount less than 20L (again with a signed letter by the company)
From the post of Mr. Sashikumar Nair, I understand that the life cover is basically to ensure gratuity payout to the beneficiaries in case of death of the employee, even if he is not eligible for gratuity (less than 5years service). Am I right?
What will be the payout from LIC GGCA Plan in case the employee dies after serving more than 5 years (eligible for gratuity)? Will his nominee get the gratuity due to him as on the date of his death PLUS the life insurance cover? or will it be ONLY gratuity amount due to him as if he had retired on due date?
I have asked these clarifications from LIC but am yet to get a reply, I shall update this post as and when I get a reply. However, members may please advice based on their own experience.
Thanks
From India, Kochi
Community Support and Knowledge-base on business, career and organisational prospects and issues - Register and Log In to CiteHR and post your query, download formats and be part of a fostered community of professionals.
Payment of Gratuity Act, 1972 & The Rules.ppt
THE PAYMENT OF GRATUITY ACT 1972.doc