Gratuity Act

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Querist : Anonymous

Querist : Anonymous (Querist)

28 October 2010 Do we also add training and Probation period while calculating Grautity

Querist : Anonymous

Querist : Anonymous (Querist)

08 November 2010 any update please

Asha Kanta Sharma

Asha Kanta Sharma (Expert)
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26 July 2024 Under the Payment of Gratuity Act, 1972, the calculation of gratuity is based on the "continuous service" of an employee. Here’s how different periods are treated:

### **1. Training and Probation Period**

**Training Period:**
- **Not Considered for Gratuity Calculation:** Generally, the training period is not considered for the calculation of gratuity unless the employee was confirmed in service after the training period and the training was a mandatory part of the employment.

**Probation Period:**
- **Considered for Gratuity Calculation:** The probation period is generally considered for gratuity calculation if the employee is confirmed and continues in service after the probation period. If the employee is confirmed and their service continues without a break, the entire period, including probation, is counted towards the 5 years of continuous service required to be eligible for gratuity.

### **2. Continuous Service**

**Definition of Continuous Service:**
- **Continuous Service Includes:** Continuous service means uninterrupted service by an employee, excluding periods of unauthorized leave. However, it does include:
- Service in a different establishment of the same employer if the employee was transferred.
- Leave taken under various leave provisions (e.g., earned leave, sick leave) is included.

**Interruption in Service:**
- **Service Breaks:** Service breaks due to reasons like unauthorized absence, resignation before completing 5 years, or termination for cause generally do not count towards continuous service for gratuity purposes.

### **3. Special Cases**

- **Training as Part of Employment:** If the training period is part of the employment contract and the employee is confirmed after the training, it might be included in the calculation of continuous service.
- **Probation Period:** The probation period is included if the employee continues to be employed after the probation period is successfully completed.

### **4. Practical Considerations**

- **Confirmation Post-Training/Probation:** Ensure that any periods of training or probation are clearly documented and the confirmation of service is appropriately recorded.
- **HR Policies:** Review company HR policies to ensure clarity on how training and probation periods are treated concerning gratuity calculations.

### **Summary**

- **Training Period:** Generally not included unless it leads directly to confirmed service.
- **Probation Period:** Included if the employee is confirmed and continues to work after the probation period.

By accurately tracking the service periods, including probation and any relevant training periods, you can ensure correct gratuity calculations in compliance with the Payment of Gratuity Act, 1972.

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