Hi,
I am Manivel, working for an MNC company in Bangalore for the past 4 years and 8 months. I will be resigning from my position in another 2 months. Therefore, I will only have completed 4 years and 10 months in this company by the time I am relieved.
Will I be eligible for the Gratuity? Please clarify.
Thanks & Regards,
Manivel Natarajan.
From India, Madras
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I am Manivel, working for an MNC company in Bangalore for the past 4 years and 8 months. I will be resigning from my position in another 2 months. Therefore, I will only have completed 4 years and 10 months in this company by the time I am relieved.
Will I be eligible for the Gratuity? Please clarify.
Thanks & Regards,
Manivel Natarajan.
From India, Madras
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Dear Manivel Natarajan,
FIVE YEARS SERVICE FOR GRATUITY
Is it necessary that an employee must have worked for five years in order to claim gratuity under the Payment of Gratuity Act?
Yes. The minimum period for becoming eligible for payment of gratuity is continuous service of not less than five years, and hence it should be complete five years. The words 'or part in excess of six months' are only meant for the purpose of computation of gratuity. Where in one case, the employee has worked for 4 years 11 months and 10 days, it has been held by the Andhra Pradesh High Court that he will not be eligible for gratuity for want of completion of five years.
Reference:
P. Raghavulu & Son VS. Addl. Labour Court Andhra Pradesh, Hyderabad and another, 1985-1 LLN 612.
Source: [The Payment Of Gratuity Act, 1972: Expects clarifications with Case Laws reference](http://paymentofgratuityact1972.blogspot.com/2010/07/expects-clarifications-with-case-laws.html)
KVJ Raghunath
From India, Vijayawada
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42FIVE YEARS SERVICE FOR GRATUITY
Is it necessary that an employee must have worked for five years in order to claim gratuity under the Payment of Gratuity Act?
Yes. The minimum period for becoming eligible for payment of gratuity is continuous service of not less than five years, and hence it should be complete five years. The words 'or part in excess of six months' are only meant for the purpose of computation of gratuity. Where in one case, the employee has worked for 4 years 11 months and 10 days, it has been held by the Andhra Pradesh High Court that he will not be eligible for gratuity for want of completion of five years.
Reference:
P. Raghavulu & Son VS. Addl. Labour Court Andhra Pradesh, Hyderabad and another, 1985-1 LLN 612.
Source: [The Payment Of Gratuity Act, 1972: Expects clarifications with Case Laws reference](http://paymentofgratuityact1972.blogspot.com/2010/07/expects-clarifications-with-case-laws.html)
KVJ Raghunath
From India, Vijayawada
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Dear KVJ Raghunath,
Thank you for your important comments. I was also confused about the 5 years continuous service condition. It would be very helpful for us if you could send us the judgment of the High Court.
Thanks,
Suresh Adav
From India, Mumbai
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Thank you for your important comments. I was also confused about the 5 years continuous service condition. It would be very helpful for us if you could send us the judgment of the High Court.
Thanks,
Suresh Adav
From India, Mumbai
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Hi,
It depends on two things:
1. What is the period specified in your offer letter (some companies pay gratuity even after completing 1 year).
2. Some companies do pay gratuity even if the employee has completed more than 4 years and 6 months. So it's better to check with your organization about the policy. If you are leaving on good terms, you have a chance of getting the gratuity.
Thanks,
Anand
From United States, Basking Ridge
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It depends on two things:
1. What is the period specified in your offer letter (some companies pay gratuity even after completing 1 year).
2. Some companies do pay gratuity even if the employee has completed more than 4 years and 6 months. So it's better to check with your organization about the policy. If you are leaving on good terms, you have a chance of getting the gratuity.
Thanks,
Anand
From United States, Basking Ridge
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But I think you are eligible for gratuity if a person completes 4 years and 240 days, then he is eligible for gratuity because the Factories Act considers 240 working days equal to one year. This means in a year, you are required to work 240 days. In that view, if any employee completes 4 years and 240 days in the current year, then he gets gratuity. This amendment was made by the Madras High Court and became effective in the year 2005.
Rajiv Singh
From India
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Rajiv Singh
From India
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Hi,
It depends on company policies. You are logically right about the period of service, that is 4 years and 8 months eligibility. The law clearly stipulates the conditions under which gratuity is payable to an employee who quits before the gratuity period of 5 years. Gratuity is one type of reward system. By its nature, it is meant to be a rewarding system provided it is given for a minimum period of time. If you are leaving on good terms, you have a chance of receiving the gratuity from your organization.
Bashir
Thanks
From India, Pune
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It depends on company policies. You are logically right about the period of service, that is 4 years and 8 months eligibility. The law clearly stipulates the conditions under which gratuity is payable to an employee who quits before the gratuity period of 5 years. Gratuity is one type of reward system. By its nature, it is meant to be a rewarding system provided it is given for a minimum period of time. If you are leaving on good terms, you have a chance of receiving the gratuity from your organization.
Bashir
Thanks
From India, Pune
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Dear Manivel,
The very important point is missed out here. As per Section 4(1) of The Payment of Gratuity Act, 1972, the completion of five years of continuous service is a must. It cannot be reduced to anything less than five years. Section 4(2) of the Act makes it necessary to round up the completed months to more than 6 months to one year. This clause or section is related to the calculation only and not the eligibility.
For example, if you complete 5 years and 7 months of service, then in such a case, the gratuity will be calculated for 6 years. However, the law does not provide any concession for the eligibility criteria of completion of 5 years. I do not deny that the company, out of good relations with the employee, can pay gratuity even if the employee worked for 2 to 3 months less than 5 years. However, in such a case, it is the employer's choice and goodwill and not the employee's legal right to claim it.
From India, Mumbai
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The very important point is missed out here. As per Section 4(1) of The Payment of Gratuity Act, 1972, the completion of five years of continuous service is a must. It cannot be reduced to anything less than five years. Section 4(2) of the Act makes it necessary to round up the completed months to more than 6 months to one year. This clause or section is related to the calculation only and not the eligibility.
For example, if you complete 5 years and 7 months of service, then in such a case, the gratuity will be calculated for 6 years. However, the law does not provide any concession for the eligibility criteria of completion of 5 years. I do not deny that the company, out of good relations with the employee, can pay gratuity even if the employee worked for 2 to 3 months less than 5 years. However, in such a case, it is the employer's choice and goodwill and not the employee's legal right to claim it.
From India, Mumbai
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Hello,
Since we are talking about gratuity here, I have a question of my own. I will complete 5 years on 31st May 2011 in my current organization, and my salary is credited on the 25th of every month. If I resign on 1st June 2011, will I be eligible for gratuity?
Thanks.
From India, Calcutta
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Since we are talking about gratuity here, I have a question of my own. I will complete 5 years on 31st May 2011 in my current organization, and my salary is credited on the 25th of every month. If I resign on 1st June 2011, will I be eligible for gratuity?
Thanks.
From India, Calcutta
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Is employees’s dependent are eligible to get Gratuity, in case if employee death though he/she has not completed mandatory 5 years of job with the company.
From Netherlands
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From Netherlands
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