Need help in calculating gratuity eligibility and amount!!!
I joined a company on 11 Jan 2012, and my last working day in that company was 28 Sept 2016. As we all know, for gratuity, we only need to complete 4 years and 240 days. I have completed 4 years, 8 months, and 17 days in that company. I need help on the following points:
1) How to count 240 working days? Will it include Saturday and Sunday? In that office, the 1st and 3rd Saturdays, and all Sundays were off.
2) (Basic*15*completed years)/26. In the formula, should I put 4.8 or 5? In my case, I have completed 4 years, 8 months, and 17 days.
Request you all to support your answers by referring to some act or document so that I can show them to the company.
From India, Gurgaon
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I joined a company on 11 Jan 2012, and my last working day in that company was 28 Sept 2016. As we all know, for gratuity, we only need to complete 4 years and 240 days. I have completed 4 years, 8 months, and 17 days in that company. I need help on the following points:
1) How to count 240 working days? Will it include Saturday and Sunday? In that office, the 1st and 3rd Saturdays, and all Sundays were off.
2) (Basic*15*completed years)/26. In the formula, should I put 4.8 or 5? In my case, I have completed 4 years, 8 months, and 17 days.
Request you all to support your answers by referring to some act or document so that I can show them to the company.
From India, Gurgaon
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Dear Akhilesh,
Please find the response to your query below:
How to count 240 working days? Will it include Saturday and Sunday? In that office, 1st and 3rd Saturdays, and all Sundays were off. - Yes, it will include the weekly off while counting 240 days.
(Basic*15*completed years)/26. In the formula, should I put 4.8 or 5? In my case, I have completed 4 years 8 months and 17 days. - You need to consider it as 5 years.
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395Please find the response to your query below:
How to count 240 working days? Will it include Saturday and Sunday? In that office, 1st and 3rd Saturdays, and all Sundays were off. - Yes, it will include the weekly off while counting 240 days.
(Basic*15*completed years)/26. In the formula, should I put 4.8 or 5? In my case, I have completed 4 years 8 months and 17 days. - You need to consider it as 5 years.
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Thank you, Manoj!!!
Can you please share a reference to any act/document which states that weekly offs will be counted in 240 days? I need to show them to the company because they said that they will not count weekly offs.
From India, Gurgaon
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Can you please share a reference to any act/document which states that weekly offs will be counted in 240 days? I need to show them to the company because they said that they will not count weekly offs.
From India, Gurgaon
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Dear Akhilesh, Please find attached copy of the judgement for your reference.
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Gratuity Eligibility! Sunday and Saturdays Will Be Counted or Not
As per the rule, the weekly off is counted. However, I have one more query regarding an employee who joined when they were not yet eligible for leave and during that same period, took leave. Should these days be calculated in the gratuity days or not?
In short, are absent days counted in gratuity days?
Please guide...
From India, Ahmedabad
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As per the rule, the weekly off is counted. However, I have one more query regarding an employee who joined when they were not yet eligible for leave and during that same period, took leave. Should these days be calculated in the gratuity days or not?
In short, are absent days counted in gratuity days?
Please guide...
From India, Ahmedabad
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If your company works for 5 days a week then 180 paid days in will be considered as a year; and not 240 days.
From India, Mumbai
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From India, Mumbai
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Under Section 4 of the Payment of Gratuity Act 1972, gratuity shall be payable to an employee on the termination of his employment after he has rendered continuous service for not less than 5 years. Termination of employment may result from superannuation, retirement, resignation, death, or disablement due to accident/disease. As held in the case of Darshan Engineering Works vs. Controlling Authority, where an employee continues to work after superannuation, he will be entitled to gratuity for the entire period and not only up to his superannuation.
Under the explanation to Section 4(1), disablement means such disablement as incapacitates an employee from the work which he was capable of performing before the accident or disease resulting in such disablement. Under Section 4(4), if an employee continues in his current employment after disablement at reduced wages, the gratuity for the period up to his disablement is to be calculated at such wages as he was being paid before disablement. The gratuity for the period after disablement is to be calculated on such reduced wages.
Under provision 1 to Section 4(1), the provision of continuous service of 5 years shall not be necessary where the termination of employment happened due to death or disablement. In case of death, the amount of gratuity to be paid to the nominee. If there was no nomination made, gratuity shall be paid to the heir. Where the nominee or heir is a minor, then the amount of gratuity shall be submitted to the controlling authority. The minor can use this fund when he attains majority.
Continuous service is defined under Section 2-A as a period of uninterrupted service, including service which may be interrupted on account of sickness, accident, leave, layoff, strike, lockout, cessation of work not due to any fault of the employees, and absence from duty without leave (not being absence in respect of which an order treating the action as a break in service has been passed in accordance with standing orders, rules, or regulations governing the employees of the establishment). As was held in the case of Dalmia Magnesite Corporation vs. Regional Labour Commissioner Madras, if this service is interrupted for a reason other than mentioned above, it shall be deemed as not continuous service.
Where an employee, not being an employee employed in a seasonal establishment, is not in continuous service for any period of 1 year, shall be deemed to be in continuous service under the employer if during the period 12 calendar months preceding the date with reference to which calculation is to be made, he has actually worked under the employee for not less than 190 days in the case of an employee employed below ground in a mine or any establishment which works for less than 6 days in a week and 240 days in any other case. Under clause 2 of Section 2A, when determining the continuous service for any period of 6 months rather than 1 year for Payment of Gratuity, the number of days the employee should have actually worked should be half the number of days actually worked which constitutes continuous service for a period of 1 year. This means if we are calculating gratuity for a period of 6 months rather than 1 year, then 190 days will be replaced by 95 days and 240 days will be replaced by 120 days.
For the number of days an employee has been laid off under an agreement or as permitted by standing orders made under the Industrial Employment Standing Order Act, 1946, or under the Industrial Dispute Act, 1947, or under any other law applicable to the establishment, he shall be deemed to be in continuous service. Likewise, if an employee has been on leave with full wages that were earned in the previous years or he has been absent due to temporary disablement caused by an accident arising out of and in the course of his employment, he shall be deemed to be in continuous service. If a female has been on maternity leave and the maternity leave is not exceeding 12 weeks, she shall be deemed to be in continuous service.
Under Clause 3 of Section 2A, in the case of seasonal establishments, an employee shall be deemed to be in continuous service if he has worked for a period constituting 75% of the number of days on which the establishment was in operation in 6 months or 1 year. In Jeevan Lal Limited v. its workmen, the claim to gratuity is not forfeited by interruption in service, even though it is over a long period, if the leave is condoned and the employee has been allowed to resume employment by the employer.
Superannuation means the attainment by the employee of such age as is fixed in the contract or conditions of service as the age on the attainment of which the employee vacates his employment. Retirement, lease termination of the service of an employee otherwise than on superannuation. This means if the employer, by his own wish, retires an employee, it will be termed as retirement. But if the employee is discharged on attainment of a specific age, then it is superannuation.
For complete details, see [Payment of Gratuity Act, Rules, Forms, Returns & All Other Information](http://www.shramsamadhan.com/p/payment-of-gratuity-act-rules.html)
From India, Kolkata
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Under the explanation to Section 4(1), disablement means such disablement as incapacitates an employee from the work which he was capable of performing before the accident or disease resulting in such disablement. Under Section 4(4), if an employee continues in his current employment after disablement at reduced wages, the gratuity for the period up to his disablement is to be calculated at such wages as he was being paid before disablement. The gratuity for the period after disablement is to be calculated on such reduced wages.
Under provision 1 to Section 4(1), the provision of continuous service of 5 years shall not be necessary where the termination of employment happened due to death or disablement. In case of death, the amount of gratuity to be paid to the nominee. If there was no nomination made, gratuity shall be paid to the heir. Where the nominee or heir is a minor, then the amount of gratuity shall be submitted to the controlling authority. The minor can use this fund when he attains majority.
Continuous service is defined under Section 2-A as a period of uninterrupted service, including service which may be interrupted on account of sickness, accident, leave, layoff, strike, lockout, cessation of work not due to any fault of the employees, and absence from duty without leave (not being absence in respect of which an order treating the action as a break in service has been passed in accordance with standing orders, rules, or regulations governing the employees of the establishment). As was held in the case of Dalmia Magnesite Corporation vs. Regional Labour Commissioner Madras, if this service is interrupted for a reason other than mentioned above, it shall be deemed as not continuous service.
Where an employee, not being an employee employed in a seasonal establishment, is not in continuous service for any period of 1 year, shall be deemed to be in continuous service under the employer if during the period 12 calendar months preceding the date with reference to which calculation is to be made, he has actually worked under the employee for not less than 190 days in the case of an employee employed below ground in a mine or any establishment which works for less than 6 days in a week and 240 days in any other case. Under clause 2 of Section 2A, when determining the continuous service for any period of 6 months rather than 1 year for Payment of Gratuity, the number of days the employee should have actually worked should be half the number of days actually worked which constitutes continuous service for a period of 1 year. This means if we are calculating gratuity for a period of 6 months rather than 1 year, then 190 days will be replaced by 95 days and 240 days will be replaced by 120 days.
For the number of days an employee has been laid off under an agreement or as permitted by standing orders made under the Industrial Employment Standing Order Act, 1946, or under the Industrial Dispute Act, 1947, or under any other law applicable to the establishment, he shall be deemed to be in continuous service. Likewise, if an employee has been on leave with full wages that were earned in the previous years or he has been absent due to temporary disablement caused by an accident arising out of and in the course of his employment, he shall be deemed to be in continuous service. If a female has been on maternity leave and the maternity leave is not exceeding 12 weeks, she shall be deemed to be in continuous service.
Under Clause 3 of Section 2A, in the case of seasonal establishments, an employee shall be deemed to be in continuous service if he has worked for a period constituting 75% of the number of days on which the establishment was in operation in 6 months or 1 year. In Jeevan Lal Limited v. its workmen, the claim to gratuity is not forfeited by interruption in service, even though it is over a long period, if the leave is condoned and the employee has been allowed to resume employment by the employer.
Superannuation means the attainment by the employee of such age as is fixed in the contract or conditions of service as the age on the attainment of which the employee vacates his employment. Retirement, lease termination of the service of an employee otherwise than on superannuation. This means if the employer, by his own wish, retires an employee, it will be termed as retirement. But if the employee is discharged on attainment of a specific age, then it is superannuation.
For complete details, see [Payment of Gratuity Act, Rules, Forms, Returns & All Other Information](http://www.shramsamadhan.com/p/payment-of-gratuity-act-rules.html)
From India, Kolkata
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Dear all,
Gratuity is a statutory liability for continuous service of five years and more. The continuous service includes weekly off, holidays, accident leave, absence where there is no break in service involved and is presumed so in case the employee works for 240 days or more cumulatively in a year with the inclusive items. In case of a break in service, such an order has to be passed.
Mayur, regarding your query, as per the rule, weekly off is counted. I have one more query: if an employee joined when they were not eligible for leave and took leave during the same duration, are these days calculated in gratuity days? In short, are absent days counted in gratuity days? The answer is yes, they are to be counted for gratuity purposes.
From India, Mumbai
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Gratuity is a statutory liability for continuous service of five years and more. The continuous service includes weekly off, holidays, accident leave, absence where there is no break in service involved and is presumed so in case the employee works for 240 days or more cumulatively in a year with the inclusive items. In case of a break in service, such an order has to be passed.
Mayur, regarding your query, as per the rule, weekly off is counted. I have one more query: if an employee joined when they were not eligible for leave and took leave during the same duration, are these days calculated in gratuity days? In short, are absent days counted in gratuity days? The answer is yes, they are to be counted for gratuity purposes.
From India, Mumbai
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