Hello sir/Madam,
How many years are eligible for Gratuity as per the Shop and Establishment Act? My boss told me that, in general, 5 years are eligible for Gratuity. As per the Shop and Establishment Act, when an employee completes his 3 years of work period, he/she is eligible for Gratuity, an amount equivalent to 1 and a half months' salary based on his basic salary.
Please clarify whether it is correct or wrong that an employee must complete 3 or 4 years to receive Gratuity for 1 and a half month's salary.
From India, Hyderabad
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2How many years are eligible for Gratuity as per the Shop and Establishment Act? My boss told me that, in general, 5 years are eligible for Gratuity. As per the Shop and Establishment Act, when an employee completes his 3 years of work period, he/she is eligible for Gratuity, an amount equivalent to 1 and a half months' salary based on his basic salary.
Please clarify whether it is correct or wrong that an employee must complete 3 or 4 years to receive Gratuity for 1 and a half month's salary.
From India, Hyderabad
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Payment of Gratuity Act is a central act. Any employee who completes 5 years continuous years of service only eligible for Gratuity.
From India, Madras
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From India, Madras
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Dear Nvgk reddy, Please note, gratuity act is centralised act and as per the same act gratuity is entitled on completion of 4 years and 240 day or more.
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Hi
I could understand from your posting that you are stationed in Hyderabad. Keeping this in mind I presume your employer is a Hyderabad Company. Hence, the Andhra Pradesh Shops & Establishments Act is applicable and as such you have stated that as per shop and establishment act, when the employee completes his 3 years of work period. He/she is eligible for Gratuity for amount of 1 and half months salary on his basic
Section 47(3) & (4) of the Andhra Pradesh Shops & Establishments Act provide in respect of an employee who has been in his employment continuously for a period of not less than one year, a service compensation amounting to fifteen days average wages for each year of continuous employment:
Sub-section 47(5) the payment of service compensation under this section shall not apply in cases where the employee is entitled to gratuity under the Payment of Gratuity Act, 1972 (Central Act 39 of 1972) and gratuity has been paid accordingly consequent on the termination or cessation of service.
Subsequently the constitutional validity of the provisions of Sub-sections (3) and (4) of Section 47 of the Shops Act was challenged by Srinivasa Resorts Limited before the Division Bench of the Hon’ble High Court, Andhra Pradesh. The Hon'ble Court held that the Sub-sections (3) and (4) of Section 47 of the Shops Act are unconstitutional and amounts to unreasonable discrimination and violative of Article 14 of the Constitution of India. Let a writ of mandamus issue accordingly. Writ petition is disposed of accordingly.
Hence, your question as per shop and establishment act, when the employee completes his 3 years of work period. He/she is eligible for Gratuity for amount of 1 and half months salary on his basic salary will not stand in the eye of law.
Now coming to the eligibility for payment of Gratuity an employee has to complete a continuous service of five years under The Payment of Gratuity Act
Regards
P.S.Lakshmanan
S. G. Management Services
(PAN INDIA Consultant – Labour Law Compliance,
PF, ESI, P Tax, Benefit Management &
POSH COMPLIANCE) - KOLKATA
From India, Kolkata
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I could understand from your posting that you are stationed in Hyderabad. Keeping this in mind I presume your employer is a Hyderabad Company. Hence, the Andhra Pradesh Shops & Establishments Act is applicable and as such you have stated that as per shop and establishment act, when the employee completes his 3 years of work period. He/she is eligible for Gratuity for amount of 1 and half months salary on his basic
Section 47(3) & (4) of the Andhra Pradesh Shops & Establishments Act provide in respect of an employee who has been in his employment continuously for a period of not less than one year, a service compensation amounting to fifteen days average wages for each year of continuous employment:
Sub-section 47(5) the payment of service compensation under this section shall not apply in cases where the employee is entitled to gratuity under the Payment of Gratuity Act, 1972 (Central Act 39 of 1972) and gratuity has been paid accordingly consequent on the termination or cessation of service.
Subsequently the constitutional validity of the provisions of Sub-sections (3) and (4) of Section 47 of the Shops Act was challenged by Srinivasa Resorts Limited before the Division Bench of the Hon’ble High Court, Andhra Pradesh. The Hon'ble Court held that the Sub-sections (3) and (4) of Section 47 of the Shops Act are unconstitutional and amounts to unreasonable discrimination and violative of Article 14 of the Constitution of India. Let a writ of mandamus issue accordingly. Writ petition is disposed of accordingly.
Hence, your question as per shop and establishment act, when the employee completes his 3 years of work period. He/she is eligible for Gratuity for amount of 1 and half months salary on his basic salary will not stand in the eye of law.
Now coming to the eligibility for payment of Gratuity an employee has to complete a continuous service of five years under The Payment of Gratuity Act
Regards
P.S.Lakshmanan
S. G. Management Services
(PAN INDIA Consultant – Labour Law Compliance,
PF, ESI, P Tax, Benefit Management &
POSH COMPLIANCE) - KOLKATA
From India, Kolkata
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The same case went for appeal in the Supreme Court too. The views of the AP HC were also concurred by the Supreme Court in February 2009.
Grand Kakatiya Sheraton Hotel & Towers Employees & Workers Union
Versus
Srinivasa Resorts Ltd. & Ors.
Bench: Lokeshwar Singh Panta, V.S. Sirpurkar
From India, Madras
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Grand Kakatiya Sheraton Hotel & Towers Employees & Workers Union
Versus
Srinivasa Resorts Ltd. & Ors.
Bench: Lokeshwar Singh Panta, V.S. Sirpurkar
From India, Madras
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As per the Gratuity Act, if an employee has worked more than 4 years and 6 months, then gratuity is applicable. The calculation is based on basic salary + DA. The total amount is divided by 26 and then multiplied by 15 days and the number of years of service.
From India, Walajapet
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From India, Walajapet
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