An employee ( date of birth 01.11.1997) who joined a company on 01.11.2018 ( age as on date of joining being 21) had met with a fatal road accident on 26.12..2019 .The employee;s basic salary ( including DA) was 26000/per month ( ie salary being reckoned for calculation of gratuity ) The company has enlisted him under group gratuity scheme linked to L I C of India, as applicable to regular employees .The employee’s age at the time of death was 21 and he had a residual service of 37 years as the standing orders prescribes the age of superannuation as 58.
Please enlighten if the employee is eligible for gratuity and if so how much he would get ?
From India, Chennai
49Please enlighten if the employee is eligible for gratuity and if so how much he would get ?
From India, Chennai
Before answering the query , let me reproduce hereuder the th elegal position as to eligibilty of an employee for gratuity as spelt by my erudite friend Mr.Umakanthan53 so as to prune redundancy and for exemplary presentation of legal poistion ( with due courtesy)
Gratuity is a statutory terminal benefit of employment available to an employee on his superannuation or retirement or resignation or on his death or disablement due to accident or disease for a blemishless and long duration of not less than 5 years of continuous service as per the provisions of sec.4 of the Payment of Gratuity Act,1972.. However, in the cases of death or disablement due to accident or disease, the first proviso to ss (1) of Sec.4 categorically states that the minimum qualifying service is not required and as such the implication in this regard is that the gratuity has to be calculated based on the actual service rendered by the employee on the date of his death or disablement as per the formula set down u/s 4(2) of the Act. The formula for computation of gratuity revolves around the factors of the no. of completed years of service and the last drawn wages only. Thus eligibility for gratuity generally arises from the nature of termination of employment whereas entitlement to gratuity arises particularly from the no. of completed years of service. In the given example, though the nature of termination of employment i.e., "death" while in service makes the employee "eligible" for gratuity,
My answer to the query is a sbelow:
The employee is ceratinly eligible of gratuity as per statute as eloborated above
As regards the tenure of service and quantum of gratuity ,I wold like to answer as below:
Since employee has been covered under group gratuity scheme tied up with LIC of India , he is eligible for gratuity as he is deemed to have rendered service till his retirement ie upto 01.11.2055 .( notional extension of service)
Clearly total service period of 37 years should be taken into account.
His last drawn salary being Rs 26,ooo per month , he will be eligible for gratuity as per formula below:
Last drawn salary ( basic pay +DA) /26X15 X37
26000/26X15X37=5,55,000
( Rupees Five Lakhs , fifty five thousand only)
From India, Chennai
Gratuity is a statutory terminal benefit of employment available to an employee on his superannuation or retirement or resignation or on his death or disablement due to accident or disease for a blemishless and long duration of not less than 5 years of continuous service as per the provisions of sec.4 of the Payment of Gratuity Act,1972.. However, in the cases of death or disablement due to accident or disease, the first proviso to ss (1) of Sec.4 categorically states that the minimum qualifying service is not required and as such the implication in this regard is that the gratuity has to be calculated based on the actual service rendered by the employee on the date of his death or disablement as per the formula set down u/s 4(2) of the Act. The formula for computation of gratuity revolves around the factors of the no. of completed years of service and the last drawn wages only. Thus eligibility for gratuity generally arises from the nature of termination of employment whereas entitlement to gratuity arises particularly from the no. of completed years of service. In the given example, though the nature of termination of employment i.e., "death" while in service makes the employee "eligible" for gratuity,
My answer to the query is a sbelow:
The employee is ceratinly eligible of gratuity as per statute as eloborated above
As regards the tenure of service and quantum of gratuity ,I wold like to answer as below:
Since employee has been covered under group gratuity scheme tied up with LIC of India , he is eligible for gratuity as he is deemed to have rendered service till his retirement ie upto 01.11.2055 .( notional extension of service)
Clearly total service period of 37 years should be taken into account.
His last drawn salary being Rs 26,ooo per month , he will be eligible for gratuity as per formula below:
Last drawn salary ( basic pay +DA) /26X15 X37
26000/26X15X37=5,55,000
( Rupees Five Lakhs , fifty five thousand only)
From India, Chennai
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