elegibility for gratuity

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ashish (Querist)
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22 October 2010 As per the Payment of Gratuity Act, 1972 “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”. However there are companies who makes the employees eligible for gratuity if they service for 4yrs 240 days (8 months) & in some companies it is 4 yrs 6 months.
Section 2A talks about continuous service. Wherein it says any employee who service for 240 days will be treated as one year continuous service.
The Act is bit contradictory in the sense, under section 4A it says” 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” Whereas as per section 2A, service of 240 days is deemed as one yr continuous service.
With the above background/reference request you to clarify below:
1. What is the eligibility period for eligibility of gratuity (is it 5 yrs OR 4yrs 6ms OR 4yrs 8ms)

Ajay Mishra

Ajay Mishra (Expert)
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23 October 2010 Hi

Payment of Gratuity
Gratuity should be paid to an employee on the termination of his employment after he has rendered service for not less than 5 years:-
- On his super- annuation
- His retirement
- His resignation
- On his death or disablement due to disease or accident

Regards

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