Gratuity Eligibility
2 years ago
Sir, I have joined a company in July 26, 2016 till 11th March, 2021. I left the company because they were not paying salary from August 2020 and kept me on leave without pay. I wanted survive and I had to pay bank loans. One offer came to me that's why i had to join new company. I waited for gratuity time will over with this company. My company saying I'm not eligible for gratuity.
A.Yes you are eligible for the same, but you need to serve legal notice and file complaint in the Labour Office too
Which type of industry you are working in and which place
Employees must have at least five years of continuous employment with their present employer to be eligible for gratuity under the Gratuity Act, unless they die or become incapacitated due to an accident or sickness. Gratuity must be paid in certain situations. Therefore in your situation the term is not yet over so they may claim, that you are not eligible for gratuity.
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Ayantika Mondal @ Prime Legal
Responded 2 years ago
As per the payment of gratuity act, A person is eligible to receive gratuity only if he has completed five years of service with an organization. These five years must be continuous and there should not be any gap in the services of the employee with that company. In your case, the services were not continuous, hence you are not eligible.
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A.Dear Sir,
The amount of Gratuity is equal to 15 days salary for every completed year of service.
Gratuity calculation is (Last drawn Basic+DA)/26 X 15 X No of completed years of service Here, we need to consider service above 6 months in the last year as next complete year. However this adjustment is subject to completion of 5 years of service. It is purely the employers contributions for the employees Gratitous service. So it can be enacted/ordered to given by the competent authority. He should also requires to work for more than 240 days in every year and should have continuous service for 5 years. In such a case, the employee is entitle for gratuity.
Section 4 in The Payment of Gratuity Act, 1972
4 Payment of gratuity. —
(1) Gratuity shall be payable to an employee on the termination of his employment after he has rendered continuous service for not less than five years,—
(a) on his superannuation, or
(b) on his retirement or resignation, or
(c) on his death or disablement due to accident or disease:
Provided that the completion of continuous service of five years shall not be necessary where the termination of the employment of any employee is due to death or disablement: 13 [Provided further that in the case of death of the employee, gratuity payable to him shall be paid to his nominee or, if no nomination has been made, to his heirs, and where any such nominees or heirs is a minor, the share of such minor, shall be deposited with the controlling authority who shall invest the same for the benefit of such minor in such bank or other financial institution, as may be prescribed, until such minor attains majority.] Explanation .— For the purposes of this section, disablement means such disablement as incapacitates an employee for the work which he was capable of performing before the accident or disease resulting in such disablement.
(2) For every completed year of service or part thereof in excess of six months, the employer shall pay gratuity to an employee at the rate of fifteen days' wages based on the rate of wages last drawn by the employee concerned: Provided that in the case of a piece-rated employee, daily wages shall be computed on the average of the total wages received by him for a period of three months immediately preceding the termination of his employment, and, for this purpose, the wages paid for any overtime work shall not be taken into account: Provided further that in the case of 14 [an employee who is employed in a seasonal establishment and who is not so employed throughout the year], the employer shall pay the gratuity at the rate of seven days' wages for each season. 15 [ Explanation. —In the case of a monthly rated employee, the fifteen days' wages shall be calculated by dividing the monthly rate of wages last drawn by him by twenty-six and multiplying the quotient by fifteen.]
(3) The amount of gratuity payable to an employee shall not exceed 16 [ten lakh rupees].
(4) For the purpose of computing the gratuity payable to an employee who is employed, after his disablement, on reduced wages, his wages for the period preceding his disablement shall be taken to be the wages received by him during that period, and his wages for the period subsequent to his disablement shall be taken to be the wages as so reduced.
(5) Nothing in this section shall affect the right of an employee to receive better terms of gratuity under any award or agreement or contract with the employer.
(6) Notwithstanding anything contained in sub-section (1),—
(a) the gratuity of an employee, whose services have been terminated for any act, wilful omission or negligence causing any damage or loss to, or destruction of, property belonging to the employer shall be forfeited to the extent of the damage or loss so caused;
(b) the gratuity payable to an employee 17 [may be wholly or partially forfeited]—
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