Gratuity Eligibility if employer seized the services before completion of 5 years

[Ramesh Kothari]

I would like to know that if employer asked his employee to leave the job before completion of 5 years of his services (seized of employment). In that case will gratuity payable to employee.

As per gratuity act it is applicable only after completion of 5 years of services. Is there any provision if employer seized the services of employee before said period. Pl let me know. Is there any case laws on this issue

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[YAGAY andSUN]

By virtue of the judgment of Supreme Court rendered under the provisions of the Industrial Dispute Act in SURENDRA KUMAR VERMA & ANR. VERSUS CENTRAL GOVT. INDUSTRIAL TRIBUNAL CUM LABOUR COURT NEW DELHI [1980 (9) TMI 285 - SUPREME COURT], 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 10 months 11 days is considered to have completed 5 years continuous service under sec.4(2) and thereby is eligible for gratuity."

[Ramesh Kothari]

Dear Mr. Yagay

This not relevant answer . Because emploere asked to leave after 2.5 years but before completion . Whereas you answer abt completion of 4years 11 month on basis of 240 days working in one year

[Ganeshan Kalyani]

Sri Ramesh Sir, have you gone through the case law cited by Sri. Yagay Sir.

[DR.MARIAPPAN GOVINDARAJAN]

Gratuity liability does not arise.

[Ramesh Kothari]

Govind sir

I know it is not arises as per section 4 (1) of gratuity Act but my question is that if gratuity is part of CTC than it is integral part of salary and same is yearly treatment given in books of accounts when it become to cost of co. In such case when employer remove employee before 5 years. Gratuity must be given many HR expert have same opinion.

However act is mum on this issue and advantage is being taken by the employer

Any case laws is there when employee remove before 5 years of services and gratuity not paid

AI Summary

Gratuity eligibility depends on completion of the statutory service period; premature termination generally precludes entitlement under the statute. Gratuity eligibility when employment is terminated by the employer before the statutory qualifying period hinges on whether continuous service can be deemed to meet the threshold; one reply cites a principle equating sufficient days worked to a year to treat near complete tenures as qualifying, while others maintain that where total service falls substantially short of the qualifying period gratuity liability does not arise, and the question persists whether contractual inclusion of gratuity in CTC alters statutory entitlement.