Dear Sir/Ma'am, I worked for 4yrs 7months in a Private IT organization (It has a 5days working modal for employees but in the monthly payslip, it shows as total calendar days). But the organization says that the employee should complete minimum 240 days in 5th year for the eligibility. 190 days is considered for an organization operating 5days in a week and employees working under the ground. Is this true? Is there a possibility to get my Gratuity for 4yrs a 7months period.
Many thanks in advance for your time.
From India, Hyderabad
Many thanks in advance for your time.
From India, Hyderabad
This is an issue very commonly raised. It is true that for deciding the eligibility for gratuity there should be 5 years with each year qualifying for 240 days in the case of workers working for six days in a week and above the ground or 190 days int he case of workers working for five days a week and below the ground of a mine. This 240 or 190 days, as the case may be, is inclusive of weekly off days, paid holidays and paid leave days. A regular employee gets salary for the month and in this process we take 30 or 31 days whereas the daily rated workers are paid for the actual physical days worked. In respect of daily rated workers the concept of 240/ 190 days is okay but in respect of monthly paid workers who are paid for the holidays and leave days, what is the significance of 240 and 190 days?
Kerala High Court and Madras High Court have ruled in separate verdicts that an employee who has worked for 4 years and 240 days int he fifth year is eligible to get gratuity. If we widens the scope of this ruling to employees in the establishments which work for 5 days in a week, the same should be applicable to employees who have worked for 4 years and 190 days in the fifth year.
In both the High Court verdicts, I feel, that there is an error and that error is on the finding that 240 days would constitute a year's service. The Act says that each year with 240/ 190 days over a period of 12 months only shall be considered as continuous service and this comes only next to the whether the employee is really eligible to gratuity. An employee, to be eligible to gratuity, should have completed five years of service and each year should qualify for 240/190 days including paid holidays etc etc. This 240/ 190 days is compartmentalized and is during a period of 12 months. Then why this 12 months period is not taken in the case of fifth year?
The judgements say that you need to have only 240/ 190 days in the fifth year and that means you need only 8 months or even 7 months in the fifth year to be entitled to gratuity. Is this fair?
Since there is no Supreme Court verdict which treats working of 240/ 190 days in the fifth year as one year service nor there is any amendment made in the Payment of Gratuity Act in this respect, I doubt the 240/ 190 days in the fifth year would be sufficient for gratuity entitlement.
As the monthly rated employee are paid full salary irrespective of the days worked, what is the relevance of 5 days working and 6 days working? It is okay with regard to workers employed below the ground because of the hardship to which they are put in. But in respect of employees who work for 5 days but paid for the entire week is it fair? When we allow them the privilege of 190 days paid days, an employee who has worked in the fifth year just six months will get gratuity.
I request my friends to please comment on this point.
From India, Kannur
4238Kerala High Court and Madras High Court have ruled in separate verdicts that an employee who has worked for 4 years and 240 days int he fifth year is eligible to get gratuity. If we widens the scope of this ruling to employees in the establishments which work for 5 days in a week, the same should be applicable to employees who have worked for 4 years and 190 days in the fifth year.
In both the High Court verdicts, I feel, that there is an error and that error is on the finding that 240 days would constitute a year's service. The Act says that each year with 240/ 190 days over a period of 12 months only shall be considered as continuous service and this comes only next to the whether the employee is really eligible to gratuity. An employee, to be eligible to gratuity, should have completed five years of service and each year should qualify for 240/190 days including paid holidays etc etc. This 240/ 190 days is compartmentalized and is during a period of 12 months. Then why this 12 months period is not taken in the case of fifth year?
The judgements say that you need to have only 240/ 190 days in the fifth year and that means you need only 8 months or even 7 months in the fifth year to be entitled to gratuity. Is this fair?
Since there is no Supreme Court verdict which treats working of 240/ 190 days in the fifth year as one year service nor there is any amendment made in the Payment of Gratuity Act in this respect, I doubt the 240/ 190 days in the fifth year would be sufficient for gratuity entitlement.
As the monthly rated employee are paid full salary irrespective of the days worked, what is the relevance of 5 days working and 6 days working? It is okay with regard to workers employed below the ground because of the hardship to which they are put in. But in respect of employees who work for 5 days but paid for the entire week is it fair? When we allow them the privilege of 190 days paid days, an employee who has worked in the fifth year just six months will get gratuity.
I request my friends to please comment on this point.
From India, Kannur
I fully agree with the error and mis understanding of 240/190 days here, many people are experiencing this situation.
- Gratuity is part of CTC, if anyone wants to avail the benefit and don't want to loose the amount should stay with the organization for at least 5yrs.
- No exception should be considered to resigned employee(s) who's getting paid for whole month and working for only 5 or 6 days in a week. Because organization is paying employees for non working days as well (There are employees who work for 8-9hrs a day and chill out week offs and There are employees who are supporting the organization out of office hours, tough times, sacrificing weekends, fear of loosing job due to org changes, covid like situation, resession etc).
- If 5 yrs is a must, then why to compromise on 4 months or supporting 240 days.. Lots of employees leave the organizations within 5 years and they can simply leave and forget the Gratuity because its a recognition from employer for standing with organization though its part of CTC. Exceptions should be only for illness, accidental or
PF is part of CTC, Gratuity is part of CTC.. Are there any organizations won't consider these outside of CTC.?
I'm not against to any employee/employer/sections/policies, healthy discussions helps a lot, make everyone clear, try to cover the gaps, make improvements and set the expectations correctly for all :)
Thank you.
From India, Hyderabad
- Gratuity is part of CTC, if anyone wants to avail the benefit and don't want to loose the amount should stay with the organization for at least 5yrs.
- No exception should be considered to resigned employee(s) who's getting paid for whole month and working for only 5 or 6 days in a week. Because organization is paying employees for non working days as well (There are employees who work for 8-9hrs a day and chill out week offs and There are employees who are supporting the organization out of office hours, tough times, sacrificing weekends, fear of loosing job due to org changes, covid like situation, resession etc).
- If 5 yrs is a must, then why to compromise on 4 months or supporting 240 days.. Lots of employees leave the organizations within 5 years and they can simply leave and forget the Gratuity because its a recognition from employer for standing with organization though its part of CTC. Exceptions should be only for illness, accidental or
PF is part of CTC, Gratuity is part of CTC.. Are there any organizations won't consider these outside of CTC.?
I'm not against to any employee/employer/sections/policies, healthy discussions helps a lot, make everyone clear, try to cover the gaps, make improvements and set the expectations correctly for all :)
Thank you.
From India, Hyderabad
https://maitri.mahaonline.gov.in/pdf...y-act-1972.pdf
From "The Payment of Gratuity Act"
------------
4 The Payment of Gratuity Act, 1972 Sec. 3
3[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
4[***] 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.]
From India, Hyderabad
From "The Payment of Gratuity Act"
------------
4 The Payment of Gratuity Act, 1972 Sec. 3
3[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
4[***] 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.]
From India, Hyderabad
I am wondering why you have posted this twice and what exactly is your question if you already have so much information and a definite opinion on it. By your own admission, having 4 years and 8 months is the cut off. So what is your query?
From India, Mumbai
From India, Mumbai
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.
Gratuity-Contin uous Service-countin g broken period with same employer-Madras HC Judgment.docx