Dear Seniors and Colleagues,
One of the employees is expected to be relieved from services on 01.09.2021. He has completed 4 years, 9 months, 2 weeks, and 4 days of service up to the relieving date in the organization. Is he eligible to receive gratuity?
Please advise.
From India, Coimbatore
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1One of the employees is expected to be relieved from services on 01.09.2021. He has completed 4 years, 9 months, 2 weeks, and 4 days of service up to the relieving date in the organization. Is he eligible to receive gratuity?
Please advise.
From India, Coimbatore
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The section states that for every completed year of service in excess of six months, the employer shall pay gratuity to an employee. If an employee completes 4 years and 6 months of continuous service in the same establishment, they are eligible to receive gratuity as per the Payment of Gratuity Act 1972.
From India, Delhi
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From India, Delhi
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Dear Malay Gauri consultants Private Limited,
Let me clear you the section related to “rounding off” of Completed Year is applicable after employee completed 05 years continuous uninterrupted services.
On basis of some court verdicts the employee may eligible for Gratuity (completed 04 years and 240 days), but your statement “completes 4 years and 6 months of continuous service” is not right approach to define the criteria.
Moreover, as per POG Act, 1972 the criteria of 04 years and 240 (or as applicable) days is still not regularized by any notification. I have seen many employer reject the Gratuity if employee has not completed continuous (uninterrupted) 05 years service. However, in such cases the employee can claim the Gratuity through putting his case to the Labour Office (or court) and by giving reference of the court verdicts.
The senior members can give more inputs on the matter.
From India, Delhi
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Let me clear you the section related to “rounding off” of Completed Year is applicable after employee completed 05 years continuous uninterrupted services.
On basis of some court verdicts the employee may eligible for Gratuity (completed 04 years and 240 days), but your statement “completes 4 years and 6 months of continuous service” is not right approach to define the criteria.
Moreover, as per POG Act, 1972 the criteria of 04 years and 240 (or as applicable) days is still not regularized by any notification. I have seen many employer reject the Gratuity if employee has not completed continuous (uninterrupted) 05 years service. However, in such cases the employee can claim the Gratuity through putting his case to the Labour Office (or court) and by giving reference of the court verdicts.
The senior members can give more inputs on the matter.
From India, Delhi
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The views of learned members that the interpretation of 4 years and 240 days as equal to 5 years of continuous service are endorsed by only a few High Courts. There is no change in law or any Supreme Court judgment rendering its applicability throughout the country. The Golden Rule of interpretation is the plain and ordinary meaning of the statutory term, which mandates that there has to be at least 5 years of continuous service to be eligible for the payment of gratuity. The purposive interpretation given in a few judgments is only helping the claim with 4 years and 240 days of service.
As regards counting of more than 4 years and six months of service as being eligible, it is not accepted in any judgment of High Courts or the Supreme Court. Section 4(2) mentions only that service in excess of six months as being eligible for gratuity for that year. So it is only for computation purposes and hence it cannot be stretched to be a part of the definition of 'Continuous Service'.
From India, Mumbai
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As regards counting of more than 4 years and six months of service as being eligible, it is not accepted in any judgment of High Courts or the Supreme Court. Section 4(2) mentions only that service in excess of six months as being eligible for gratuity for that year. So it is only for computation purposes and hence it cannot be stretched to be a part of the definition of 'Continuous Service'.
From India, Mumbai
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Dear KKHR,
Sir, your explanations have been very useful to us. We understand that for the purpose of ascertaining the eligibility of a staff for the payment of gratuity, 5 years of continuous service is essential, and any partial service (be it 6 months or more) should not be considered as one year. Am I correct in my understanding, sir?
From India, Chennai
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Sir, your explanations have been very useful to us. We understand that for the purpose of ascertaining the eligibility of a staff for the payment of gratuity, 5 years of continuous service is essential, and any partial service (be it 6 months or more) should not be considered as one year. Am I correct in my understanding, sir?
From India, Chennai
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You are correct to the point that 4 years and six months of service won't qualify for gratuity as per PGA 1972. Also, please note that the Madras High Court has held that 4 years and 240 days would entitle the employee to gratuity. Ref. 1998 LLR 1072 MADRAS HIGH COURT, Honorable Mr. S.M. Abdul Wahab J. in W.P. No. 21350 of 1987 Decided on 12.6.1996 (Mettur Beardse Ltd. (represented by Its Personnel Manager), Madras vs. Regional Labour Commissioner (Central) & Authority under Payment of Gratuity Act, Madras & Others). Since your tagline indicates Chennai location, this judgment is directly applicable.
From India, Mumbai
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From India, Mumbai
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SBT Vs Asst. Labour Commissioner- Gratuity dismissed employee-LTS.PD F
FORM I(Application for Gratuity by an employee).doc