Gratuity Act 1972 ...... need clarity
The payment of gratuity ( second amendment) act, 1984 clarifies this. One needs to calculate the no of years and service completion as follows.
Section 2A
1. 4 years and 6 months (190 days = 1 year) where the company follows 5 day a week.
2. 4 years and 8 months ( 240 days = 1 year) where the company follows 5 day a week.
What happens when the establishment works 6 days a week on 1st and 3rd week and 5 days a week on 2nd and 4th week of the month .
Request expert opinion .
From India
The payment of gratuity ( second amendment) act, 1984 clarifies this. One needs to calculate the no of years and service completion as follows.
Section 2A
1. 4 years and 6 months (190 days = 1 year) where the company follows 5 day a week.
2. 4 years and 8 months ( 240 days = 1 year) where the company follows 5 day a week.
What happens when the establishment works 6 days a week on 1st and 3rd week and 5 days a week on 2nd and 4th week of the month .
Request expert opinion .
From India
Dear Aakash,
Really it is a thought provoking question. I think that one should necessarily try to answer this question in such a manner that the answer supports the liberal and beneficial rule of interpretation for which section 2-A was introduced in the Payment of Gratuity Act,1972 in the wake of the observation of the Supreme Court in the Lalappa & Lingappa judgment.
The statutory definition of the term "continuous service" meant u/s 2 (c) of the Act for the purpose payment of gratuity is contained in the subsequently introduced Section 2-A of the Act.
Sub section (1) of Sec.2-A describes generally the elements or components of the continuous service under the Act. This includes certain interruptions to be construed as non-interruptions for the purpose of calculation of continuous service for a period. We know well that weekly-off or weekly holidays and National and Festival holidays on which normally employees do not work are treated as days of duty only. Then the interruptions of absence of an employee for work could only be due to (1) sickness (2) accident (3) leave (4) unauthorized absence from duty which has not been declared as break in service by means of an order passed in accordance with the Standing Orders or Service Regulations (5) lay-off (6) strike or a lock out or cessation of work not due to the fault of the employee as exhaustively enumerated therein. But, this part of the definition, though describing what continuous service comprises of, does not quantify the period during which the permissible interruptions may occur. Therefore, to quantify both the over all period and the permissible interruptions, one has necessarily to move on to the other sub sections of section 2-A.
Sub sections (2) and (3) quantifies the over all period of service during within which such interruptions can occur and the minimum no of days inclusive of such interruptions.
Section 2-A (2) comprises of two clauses viz., cl (a) and cl (b) for the period of one year and six months respectively. Let us confine our discussion to 2-A(2)(a) only as your query pertains to it alone.
Part(i) of clause (a) of ss (2) deals with case of one year in respect of the minimum no of days in respect 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 thus fixes the minimum number as 190 days in the preceding 12 months period.
Part (ii) of cl (a) of ss (2) fixes the minimum no as 240 days in any other case.
Coming to the establishment which works for 2 five-day weeks and 2 six-day weeks alternatively in every month, works for a total period of 286 days in 52 weeks of the year and on an average works for about only 5.5 days per week.
Therefore, in my opinion, the employees of such an establishment would come under Sec.2-A(2)(a)(i) only and eligible for gratuity for the years in which they complete 190 days of continuous service.
From India, Salem
6018Really it is a thought provoking question. I think that one should necessarily try to answer this question in such a manner that the answer supports the liberal and beneficial rule of interpretation for which section 2-A was introduced in the Payment of Gratuity Act,1972 in the wake of the observation of the Supreme Court in the Lalappa & Lingappa judgment.
The statutory definition of the term "continuous service" meant u/s 2 (c) of the Act for the purpose payment of gratuity is contained in the subsequently introduced Section 2-A of the Act.
Sub section (1) of Sec.2-A describes generally the elements or components of the continuous service under the Act. This includes certain interruptions to be construed as non-interruptions for the purpose of calculation of continuous service for a period. We know well that weekly-off or weekly holidays and National and Festival holidays on which normally employees do not work are treated as days of duty only. Then the interruptions of absence of an employee for work could only be due to (1) sickness (2) accident (3) leave (4) unauthorized absence from duty which has not been declared as break in service by means of an order passed in accordance with the Standing Orders or Service Regulations (5) lay-off (6) strike or a lock out or cessation of work not due to the fault of the employee as exhaustively enumerated therein. But, this part of the definition, though describing what continuous service comprises of, does not quantify the period during which the permissible interruptions may occur. Therefore, to quantify both the over all period and the permissible interruptions, one has necessarily to move on to the other sub sections of section 2-A.
Sub sections (2) and (3) quantifies the over all period of service during within which such interruptions can occur and the minimum no of days inclusive of such interruptions.
Section 2-A (2) comprises of two clauses viz., cl (a) and cl (b) for the period of one year and six months respectively. Let us confine our discussion to 2-A(2)(a) only as your query pertains to it alone.
Part(i) of clause (a) of ss (2) deals with case of one year in respect of the minimum no of days in respect 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 thus fixes the minimum number as 190 days in the preceding 12 months period.
Part (ii) of cl (a) of ss (2) fixes the minimum no as 240 days in any other case.
Coming to the establishment which works for 2 five-day weeks and 2 six-day weeks alternatively in every month, works for a total period of 286 days in 52 weeks of the year and on an average works for about only 5.5 days per week.
Therefore, in my opinion, the employees of such an establishment would come under Sec.2-A(2)(a)(i) only and eligible for gratuity for the years in which they complete 190 days of continuous service.
From India, Salem
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