Hi, I have worked in the organization for the period approx. 4.10 Years (from 1.4.2016 to 8.2.2021) and the organization is refusing the eligibility of gratuity. I have overviewed the various sites and know from the other sources that this period comes under Gratuity benefits. Further "Gratuity Act" itself mentions 4 years continuous service and 5th year 240 days come under this Gratuity eligibility.
Please suggest and provide the relevant documented sources so that I can further escalate my matter with the company and other government agencies.
From India, New Delhi
1Please suggest and provide the relevant documented sources so that I can further escalate my matter with the company and other government agencies.
From India, New Delhi
Dear Ketan,
From 1st Apr 2020 to 8th Feb 2021, you have worked for 314 days. Hope your service was continuous and there was not a break in between. Break means absence without authorisation.
Did you fill Form 1 of the Payment of Gratuity Act, 1972 and hand it over to HR? If not then I recommend you do so. Fill the form in two hard copies, give one copy to HR and obtain seal and signature on the second one. The persons working in the HR department cannot refuse to accept the form. Tell them to give an explanation in a return reply under the provisions of which clause of the Payment of Gratuity Act, 1972, the claim cannot be entertained.
While dealing with the HR professionals, please be polite. Whatever instigation may be, please do not lose your composure.
If the HR professionals refuse to accept the Form I then send it by Speed Post. Later, scan the second copy along with the receipt from the post office and send the claim by email. Take a printout and preserve all the correspondence carefully.
In case, if you do not receive a reply or the reply does not have legal validity then send a letter to the MD of the company. Explain how you are eligible to get the gratuity. Send the filled form once again.
As of now, you may implement whatever I have written above. Let us see how things unfold. Further advice will be given thereafter.
Thanks,
Dinesh Divekar
From India, Bangalore
From 1st Apr 2020 to 8th Feb 2021, you have worked for 314 days. Hope your service was continuous and there was not a break in between. Break means absence without authorisation.
Did you fill Form 1 of the Payment of Gratuity Act, 1972 and hand it over to HR? If not then I recommend you do so. Fill the form in two hard copies, give one copy to HR and obtain seal and signature on the second one. The persons working in the HR department cannot refuse to accept the form. Tell them to give an explanation in a return reply under the provisions of which clause of the Payment of Gratuity Act, 1972, the claim cannot be entertained.
While dealing with the HR professionals, please be polite. Whatever instigation may be, please do not lose your composure.
If the HR professionals refuse to accept the Form I then send it by Speed Post. Later, scan the second copy along with the receipt from the post office and send the claim by email. Take a printout and preserve all the correspondence carefully.
In case, if you do not receive a reply or the reply does not have legal validity then send a letter to the MD of the company. Explain how you are eligible to get the gratuity. Send the filled form once again.
As of now, you may implement whatever I have written above. Let us see how things unfold. Further advice will be given thereafter.
Thanks,
Dinesh Divekar
From India, Bangalore
Dear Ketan,
On first part: You can only be eligible for gratuity after 1.04.2021 because you are completing 5 years of service on that day. It also requires to assess whether all these five years are of Continuous Nature or not. This is the thumb rule of Gratuity Act. Your employer is right on his decision of eligibility criteria.
On 2nd Part: To get your Gratuity, you have to file a case against the employer in claim of gratuity. In the instant matter the court is the right forum to consider your conceived norms " 4 years continuous service and 5th year 240 days come under this Gratuity eligibility ". You can file the case take the reference of Varma Industries Pvt ltd Gratuity case of Karnataka High Court as your employer did not pay you the Gratuity within stipulated time and WP2135 of 1987 of Madras High Court for the years of service.
From India, Mumbai
On first part: You can only be eligible for gratuity after 1.04.2021 because you are completing 5 years of service on that day. It also requires to assess whether all these five years are of Continuous Nature or not. This is the thumb rule of Gratuity Act. Your employer is right on his decision of eligibility criteria.
On 2nd Part: To get your Gratuity, you have to file a case against the employer in claim of gratuity. In the instant matter the court is the right forum to consider your conceived norms " 4 years continuous service and 5th year 240 days come under this Gratuity eligibility ". You can file the case take the reference of Varma Industries Pvt ltd Gratuity case of Karnataka High Court as your employer did not pay you the Gratuity within stipulated time and WP2135 of 1987 of Madras High Court for the years of service.
From India, Mumbai
Nowhere in the Payment of Gratuity Act it is mentioned that "4 years continuous service and 5th year 240 days come under this Gratuity eligibility". As pr the Act n employee becomes eligible to gratuity only when he completes 5 years of "continuous service". It is while interpreting the meaning of continuous service that it is said that 240 days in a period of 12 months would constitute continuous service. Therefore, the primary requirement for gratuity is completion of 5 years and the secondary requirement is that service should be continuous or uninterrupted or without any break. Then comes what constitutes continuous service and that is 240 days service.
If you start calculating service in compartments of 240 then it may even lead to other demands, like over 5 years there would be 1200 days (5X240) one may have worked for 365 days a year and in total 3 years and few months he would complete 1200 days. Will he be eligible to gratuity? No.
However, there are two verdicts from High Courts (Kerala and Madras) directing the employers to pay gratuity to the respective employees who have not completed 5 years but have worked for 4 years and 240 days in the fifth year. Based on these judgements you can also demand gratuity from your employer. Obviously, the employer can deny it saying that nowhere in the Act it is said that 4 years and 240 days of service would be enough for entitlement of gratuity. The employer may refuse to accept a ruling by a High Court of another state, though the dictum of the verdict shall be adopted in reference.
From India, Kannur
If you start calculating service in compartments of 240 then it may even lead to other demands, like over 5 years there would be 1200 days (5X240) one may have worked for 365 days a year and in total 3 years and few months he would complete 1200 days. Will he be eligible to gratuity? No.
However, there are two verdicts from High Courts (Kerala and Madras) directing the employers to pay gratuity to the respective employees who have not completed 5 years but have worked for 4 years and 240 days in the fifth year. Based on these judgements you can also demand gratuity from your employer. Obviously, the employer can deny it saying that nowhere in the Act it is said that 4 years and 240 days of service would be enough for entitlement of gratuity. The employer may refuse to accept a ruling by a High Court of another state, though the dictum of the verdict shall be adopted in reference.
From India, Kannur
@ Madhu sir: When we calculate 240 days for gratuity purpose,Is it means that 240 days i.e (Actual present days or paid days inclusive of all holidays/weeklyoff/leave with wages?//// Please clairfy
From India, Shahkot
From India, Shahkot
Even though the questions about the actual meaning of the term ' continuous service ' u/s 2-A of the PG Act,1972 vis-a-vis its section 4(1) and the acceptability of the interpretation of the same by Madras High Court in Mettur Beardsel Ltd case are oft-repeated ones, I would like to highlight that sec.2-A of the PGA is in pari materia with sec.25-B of the ID Act,1947 which also defines continuous service. Here, the Supreme Court laid down the method of calculation of continuous service in a similar fashion to that of Madras High Court supra in Sureshkumar Verma v. Central Govt. Industrial Tribunal [ 1980 (4) SCC 433 ] and in Mohanlal v. Bharat Electronics Ltd [ AIR 1981 SC 1253 ].
Regarding the questions of binding nature and acceptability of the ratio decidendi of one particular High Court by other High Courts, I would point out further that in Valliamma Champaka Pillai v. Sivadhanupillai [ 1979 (8) TMI 210 ], the Supreme Court held that it is well-settled that the decision of one High Court is not a binding precedent upon another High Court and at least can have a persuasive value (but) however at the cost of repetition, we must emphasize that the decision of another High Court rendered in the context of an all-India Act would have persuasive value and normally to maintain uniformity and certainty we would adopt the view of that High Court.
To my knowledge so far there is no contrary judgment in this regard by any other High Court. As it is clearly evident that there is interpretative analogy between the earlier judgments of the Supreme Court and the judgment of the Madras High Court cited supra, the doctrine of persuasive adoption of the judgment of one High Court in a Central law for the sake of uniformity and certainty, as laid down by the Apex Court, should be followed unless there is any contextual difference.
Hence the poster can file a formal claim before the Controlling Authority under the PGA for gratuity together with interest for the period of default.
From India, Salem
Regarding the questions of binding nature and acceptability of the ratio decidendi of one particular High Court by other High Courts, I would point out further that in Valliamma Champaka Pillai v. Sivadhanupillai [ 1979 (8) TMI 210 ], the Supreme Court held that it is well-settled that the decision of one High Court is not a binding precedent upon another High Court and at least can have a persuasive value (but) however at the cost of repetition, we must emphasize that the decision of another High Court rendered in the context of an all-India Act would have persuasive value and normally to maintain uniformity and certainty we would adopt the view of that High Court.
To my knowledge so far there is no contrary judgment in this regard by any other High Court. As it is clearly evident that there is interpretative analogy between the earlier judgments of the Supreme Court and the judgment of the Madras High Court cited supra, the doctrine of persuasive adoption of the judgment of one High Court in a Central law for the sake of uniformity and certainty, as laid down by the Apex Court, should be followed unless there is any contextual difference.
Hence the poster can file a formal claim before the Controlling Authority under the PGA for gratuity together with interest for the period of default.
From India, Salem
Dear Vijendra,
For calculating 240 days under any Act, the days the employee remained on leave with pay, his paid weekly off days, paid holidays and of course, in the case of female, maternity leave days, will be considered as days worked. In short 240 days is the 240 PAID DAYS.
From India, Kannur
For calculating 240 days under any Act, the days the employee remained on leave with pay, his paid weekly off days, paid holidays and of course, in the case of female, maternity leave days, will be considered as days worked. In short 240 days is the 240 PAID DAYS.
From India, Kannur
Dear Seniors
As per PGA, 5 years of continuous service is mandatory for the payment of Gratuity. In the continued development, madras high court has clarified that the continuous service of 4 years and 240 days of service in the 5th year will make the employee eligible for Gratuity.
I would like to know whether this judgement is specific for involuntary separation such as retrenchment, termination or even for voluntary resignation too.
If this is applicable for all the cases, I would like to know why the government has not amended the act itself to provide better clarity.
Need your valuable input please.
Best regards
S Rangarajan
From India, Pondicherry
As per PGA, 5 years of continuous service is mandatory for the payment of Gratuity. In the continued development, madras high court has clarified that the continuous service of 4 years and 240 days of service in the 5th year will make the employee eligible for Gratuity.
I would like to know whether this judgement is specific for involuntary separation such as retrenchment, termination or even for voluntary resignation too.
If this is applicable for all the cases, I would like to know why the government has not amended the act itself to provide better clarity.
Need your valuable input please.
Best regards
S Rangarajan
From India, Pondicherry
Dear Rangarajan,
I am not sure whether your interest that prompted the question again is whether employee-specific, employer-specific or law-specific.
Amendment of a particular provision of any law is imperative only when it is inconsistent with any other provision of the same law or any other corresponding law in force.
So far as the subject-matter of gratuity is concerned, the Payment of Gratuity Act,1972 is in itself a complete Code. Section 4 (1) of the Act provides that gratuity shall be payable to an employee on the termination of his employment due to certain reasons after he has rendered continuous service for not less than five years. The proviso to the above sub-section gives relaxation to the above condition to the case of death or disablement of the employee. Here the quantum of not less than five years is qualified by the phrase " continuous service " which has been defined u/s 2-A of the Act. Section 2-A, not only defines the term but also lays down how it should be calculated. Like I said in my previous post, the definition under section 2-A of the PGA,1972 is similar to that of section 25-B of the Industrial Disputes Act,1947 in content, meaning and the method of calculation. Therefore, the fact of the matter is not the passage of the period of five years but the completion of the continuous service of 240 days or 190 days as the case be every year within the said stretch of five years. Thus it is a matter of interpretation only in which the rule of beneficial construction has to be adopted as the PGA,1972 is a welfare legislation covering the important aspect of social security to the working class.
That is why the definition of continuous service is retained u/s 54 of the Code on Social Security,2020 without any change.
From India, Salem
I am not sure whether your interest that prompted the question again is whether employee-specific, employer-specific or law-specific.
Amendment of a particular provision of any law is imperative only when it is inconsistent with any other provision of the same law or any other corresponding law in force.
So far as the subject-matter of gratuity is concerned, the Payment of Gratuity Act,1972 is in itself a complete Code. Section 4 (1) of the Act provides that gratuity shall be payable to an employee on the termination of his employment due to certain reasons after he has rendered continuous service for not less than five years. The proviso to the above sub-section gives relaxation to the above condition to the case of death or disablement of the employee. Here the quantum of not less than five years is qualified by the phrase " continuous service " which has been defined u/s 2-A of the Act. Section 2-A, not only defines the term but also lays down how it should be calculated. Like I said in my previous post, the definition under section 2-A of the PGA,1972 is similar to that of section 25-B of the Industrial Disputes Act,1947 in content, meaning and the method of calculation. Therefore, the fact of the matter is not the passage of the period of five years but the completion of the continuous service of 240 days or 190 days as the case be every year within the said stretch of five years. Thus it is a matter of interpretation only in which the rule of beneficial construction has to be adopted as the PGA,1972 is a welfare legislation covering the important aspect of social security to the working class.
That is why the definition of continuous service is retained u/s 54 of the Code on Social Security,2020 without any change.
From India, Salem
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Gratuity Act-Teachers-Ma dhya Pradesh.docx
Payment of Gratuity Act, 1972 & The Rules.ppt