One of our employees joined on 1st April 2009 is retiring on 15th February 2014. Is he eligible for gratuity? Kindly give us your advice with reasons.
From India, Mumbai
12From India, Mumbai
Hello Dear
According to Payment of Gratuity Act (Sec-2(A) if Employee complete 4 Year and 240 day than they will be eligible for Gratuity and in this case Employee Date of Joing 01-04-2009 and he completed own 4 Year on 01-04-2013 and upto 15-02-2014 their working days more than 240 so they will be eligible for Gratuity.
Thank You
Regard
Abhishek Singh
(Executive-HR)
From India
According to Payment of Gratuity Act (Sec-2(A) if Employee complete 4 Year and 240 day than they will be eligible for Gratuity and in this case Employee Date of Joing 01-04-2009 and he completed own 4 Year on 01-04-2013 and upto 15-02-2014 their working days more than 240 so they will be eligible for Gratuity.
Thank You
Regard
Abhishek Singh
(Executive-HR)
From India
Hello Abhishek, do you have any amendments pertaining to your reply. If yes then pls attached. I already have Madras High court judgement but that is not enough.
From India, Mumbai
From India, Mumbai
Dear shaikhsohail,
I am totally agree with the views of Mr. Abhishek and would also like to add that Section 2A of The Payment of Gratuity Act for Continuous Services itself says that:
(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;
It clearly means that, if an employee work for 240 days in a year, then it will counted as a complete year. So, as the employee has already completed 4 Years and 240+ days in 5th year, he is eligible for Gratuity.
Apart from this, I would like to mention that as you have mentioned that the employee is retiring on that date, that means he cannot work further as per your company rules. Otherwise, govt. has revised the retirement age to 60 years, even proposed for 62.
So, if your organization let him work more than he could complete 5 years..!! If your organization want to pay him gratuity then your organization may also award him gratuity on his retirement as he has given this much time to your organization or his retirement may also extend for 2 months as a special case. By this way, his 5 years will be completed and you can easily pay him gratuity.
Final decision is of your organization.
From India, Delhi
I am totally agree with the views of Mr. Abhishek and would also like to add that Section 2A of The Payment of Gratuity Act for Continuous Services itself says that:
(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;
It clearly means that, if an employee work for 240 days in a year, then it will counted as a complete year. So, as the employee has already completed 4 Years and 240+ days in 5th year, he is eligible for Gratuity.
Apart from this, I would like to mention that as you have mentioned that the employee is retiring on that date, that means he cannot work further as per your company rules. Otherwise, govt. has revised the retirement age to 60 years, even proposed for 62.
So, if your organization let him work more than he could complete 5 years..!! If your organization want to pay him gratuity then your organization may also award him gratuity on his retirement as he has given this much time to your organization or his retirement may also extend for 2 months as a special case. By this way, his 5 years will be completed and you can easily pay him gratuity.
Final decision is of your organization.
From India, Delhi
Hello,
Thank you for your reply.
I am still waiting for any amendments where 4.8 yrs is mention as payable period for gratuity.
We all are professional people and cannot get emotional to situations.
Best Regards
Sohail Shaikh
From India, Mumbai
Thank you for your reply.
I am still waiting for any amendments where 4.8 yrs is mention as payable period for gratuity.
We all are professional people and cannot get emotional to situations.
Best Regards
Sohail Shaikh
From India, Mumbai
Dear Sohail,
It is not an emotional approach, it's a practical approach for professionalism.
And, here is not the case 4 years and 8 months..!! Its is the case of 4 Years 10 Months and 15 days, only 45 days less..!! So, it is better to extend his retirement till 31 March, 2014 and accordingly retire him on that date with all statutory benefits.
Apart from this, a per my knowledge there is no such amendment in the Act. It is in practice with reference to the Court's Judgement only.
From India, Delhi
It is not an emotional approach, it's a practical approach for professionalism.
And, here is not the case 4 years and 8 months..!! Its is the case of 4 Years 10 Months and 15 days, only 45 days less..!! So, it is better to extend his retirement till 31 March, 2014 and accordingly retire him on that date with all statutory benefits.
Apart from this, a per my knowledge there is no such amendment in the Act. It is in practice with reference to the Court's Judgement only.
From India, Delhi
Dear Sohail Shaikh,
I agree with my colleague Sh Abhishek Singh that your employee has clear-cut completed FOUR years and for the LAST year from 1st April 2013 to 15th February 2014, you have to calculate the number of days he has worked. If he has put in 240 days as spelt out in Secion 2A of the Payment of Gratuity Act,1972, then he shall be eligible to draw the gratuity.
BS Kalsi
Member since Aug 2011
From India, Mumbai
I agree with my colleague Sh Abhishek Singh that your employee has clear-cut completed FOUR years and for the LAST year from 1st April 2013 to 15th February 2014, you have to calculate the number of days he has worked. If he has put in 240 days as spelt out in Secion 2A of the Payment of Gratuity Act,1972, then he shall be eligible to draw the gratuity.
BS Kalsi
Member since Aug 2011
From India, Mumbai
Dear All Good Morning Please find the enclosed file regarding Madras Judgement for this type of case. I hope after seen this document, your all doubt is clear. Thank you Regard Abhishek Singh
From India
From India
Dear Anuj Saini. Please find attached herewith Form 'F' prescribed under PG Rules.One needs to submit the form in duplicate. BS Kalsi, Member since Aug 2011
From India, Mumbai
From India, Mumbai
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Gratuity Eligibility.pdf
Gratuity eligibility for less than 5 yrs. (4yrs.240days). docx