Hi,
There are two different theories that I came across pertaining to deciding the eligibility of gratuity payment:
A. 4 years and 240 days of the 5th year
B. 4 years and 6 months (as every 6 months will be considered as part of the next year, meaning 4.6 becomes 5).
However, the Payment of Gratuity Act states the eligibility as 5 years of continuous service. I request if you can provide me with sufficient clarity and support with any case law or judgments passed so far.
Regards,
Satya
From India, Bangalore
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There are two different theories that I came across pertaining to deciding the eligibility of gratuity payment:
A. 4 years and 240 days of the 5th year
B. 4 years and 6 months (as every 6 months will be considered as part of the next year, meaning 4.6 becomes 5).
However, the Payment of Gratuity Act states the eligibility as 5 years of continuous service. I request if you can provide me with sufficient clarity and support with any case law or judgments passed so far.
Regards,
Satya
From India, Bangalore
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A fraction of a year over six months is considered as one year for the purpose of calculating the amount of gratuity but not for deciding whether the employee is eligible for gratuity or not. Therefore, if an employee leaves after completing 6 years and 7 months (or even 6 months and one day), then he will get gratuity for seven years, rounding off the 7 months as one year. However, for deciding eligibility, a fraction of a year over six months is not counted, and it is purely based on the completed years of service.
Though the Payment of Gratuity Act strictly states that five years from the date of joining are mandatory to make an employee eligible for gratuity, following the Madras High Court verdict in Beardsell's case, an employee who has completed four years and 240 days in the fifth year is eligible for gratuity. However, since this is an HC verdict, it may not be universally accepted by other states. Still, some states have followed it.
Regards,
Madhu.T.K
From India, Kannur
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4483Though the Payment of Gratuity Act strictly states that five years from the date of joining are mandatory to make an employee eligible for gratuity, following the Madras High Court verdict in Beardsell's case, an employee who has completed four years and 240 days in the fifth year is eligible for gratuity. However, since this is an HC verdict, it may not be universally accepted by other states. Still, some states have followed it.
Regards,
Madhu.T.K
From India, Kannur
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Dear Satya,
I do not think any further clarification is required after the explanation provided by Mr. Madhu T.K. However, if you wish, I would also like to support the views and opinions expressed by Mr. Madhu T.K.
Regards,
R.N.Khola
From India, Delhi
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I do not think any further clarification is required after the explanation provided by Mr. Madhu T.K. However, if you wish, I would also like to support the views and opinions expressed by Mr. Madhu T.K.
Regards,
R.N.Khola
From India, Delhi
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As Madhu has cleared this issue, I would like to mention that if an employee has completed 240 days in a year, it is considered a full year. According to the law, if an employee has completed 240 days, he will be considered in continuous service for the complete year.
From India, Delhi
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From India, Delhi
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I understand that if any of the High Courts has given the verdict, it is applicable for all the states until some other High Court rules against it. If the latter High Court gives such a verdict, it is applicable only to that specific state, and for the other states, the former verdict will continue to be followed until the verdict of the High Court or the Supreme Court of India comes.
Regards,
YK
From India, Mumbai
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Regards,
YK
From India, Mumbai
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