2 Answers
Dear Client, You are eligible for gratuity and your employer cannot legally deny it to you.
The Supreme Court has settled this debate in three landmark rulings which are Md Ali, Mohan Lal, and Surendra Kumar Verma case clarifying that it is not necessary that the workman should be in service for one full calendar year, as 240 days are equal to "continuous service" for that year. This means the five year continuous service rule is flexible, and legally 4 years and 240 days qualifies for gratuity.
In the important case of Mettur Beardsell Limited v. Regional Labour Commissioner, it was held that if an employee works for 240 days in the fifth year, then it would amount to one whole year, thereby satisfying the condition of five years under Section 2A. This is quite different from previous judgments wherein the completion of one year had to be strictly followed. As per your case, you have fulfilled the 5-year condition by working 4 years and 8 months.
Statutory interpretation and court rulings indicate that where an employee has served four years and 240 days during the fifth year, he will qualify for gratuity payments according to the Payment of Gratuity Act. Many labour courts, commissioners, and employers have used this argument to justify the payment of gratuity in such instances. The strict stance of denying gratuity on account of lack of five years of service might not hold up legally, and labour tribunals will most likely find in favour of the employee if 240 days were served during the fifth year.
I would suggest you to file an application to claim gratuity right away in the manner as prescribed. If this is rejected by the employer, then you can go to the Controlling Authority under Payment of Gratuity Act, that is, the Deputy Labour Commissioner of your area along with your appointment certificate, pay slips, and attendance sheet. This Controlling Authority can order the payment along with interest at 10 percent per annum.
I hope this helps, and if you have any further issues, do not hesitate to contact us.
Dear Client,
Yes, you are likely eligible for gratuity in India if you have completed 4 years and 8 months of continuous service with the same employer. Under the Payment of Gratuity Act, 1972, gratuity is generally payable after 5 years of continuous service, but an employee who completes 4 years and 240 working days (around 4 years 8 months) is treated as having completed 5 years and is eligible for gratuity, as upheld by the Supreme Court and the Madras High Court interpretations of the law. If the period you mention exactly corresponds to at least 240 days in the fifth year (inclusive of earned leaves, sick leave, etc.), you can claim gratuity upon qualifying events like resignation, retirement, or superannuation.
I hope this helps and if you have any further issues do not hesitate to contact us.