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Labor »Posted 29 Jul 2012             Click here for Free Legal Advice           Disclaimer

Legal questions & answers

Gratuity


Gratuity   Dear Team

I have completed my 5 years job in a Pvt. company in 23rd July 2012. if i am leaving the company immediately, will i eligible for gratuity.


   yes, u are eligible for gratuity
Lawyer Id: E00005317    Talk to this Lawyer                          Click here for free legal advice


   Dear Client,
Clarity between gratuity eligibility service (5 or 4.8 yrs)?

The gratuity eligibility service as per Gratuity Act 1972 is 5 years.

But as per the judgment from Supreme Court below and the quotation from the book quoted below it seems that the gratuity eligibility service is 4 years 240 days.

"Judgment from Supreme Court:

"Yes, by virtue of the judgment of Supreme Court rendered under the provisions of the Industrial Dispute Act in Surendra Kumar Verma vs. Central Govt. Industrial Tribunal,[(1980) (4) S.C.C.433)], it is enough that an employee has a service of 240 days in the preceding 12 months and it is not necessary that he should have completed one whole year’s service. As the definition of continuous service in Industrial Dispute Act and Payment of Gratuity Act are synonymous, the same principal can be adopted under the act also and hence an employee rendering service of 4 year 10months 11days is considered to have completed 5 years continuous service under sec.4(2) and thereby is eligible for gratuity."

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.

Is eligible for gratuity.The payment of gratuity ( second amendment) act, 1984 clarifies this. One needs to calculate the no of years and service completion as follows.

A company which follows 5 day week

Doj 1.05.2000 -

01.05.2000 to 30.04.2001 - worked for 190 days
01.05.2001 to 30.04.2002 - worked for 190days

If we go by the above formula and if the person does not have any break in service he will be eligible for gratuity on 01.11.2004 "

Non clarity of this rule has created confusion among a lot of employees. As some hear that some companies are following the 4 years 240 days rule, while some follow the 5 year rule. Please help remove this confusion so that nobody rights of gratuity are being compromised on.


Lawyer Id: E00001491    Talk to this Lawyer                          Click here for free legal advice


   Sir, if the compay is having more than 20 employees then then company has to pay gratuity to all the employees. In your case, since you have completed more than five years you are eligible for the same. If deny gratuity by the company then you can issue a legal notice immediately and then file a case before the controlling authority under the Act,

All the best

Please don't hesitate to contact me for further clarification if any.

S.Makesh
Advocate
Madras High Court
Lawyer Id: E00002721    Talk to this Lawyer                          Click here for free legal advice

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