Gratuity-minimum no. of 240 working days/year

This query is : Resolved

Querist : Anonymous

Querist : Anonymous (Querist)

19 August 2013 Dear Sirs,

I have certain doubts about gratuity act, kindly clarify.

As per Gratuity Act an employee to be eligible for gratuity has to work for a minimum of 240 days / year.

1. Kindly let me know from which date 240 days would be reckoned (starting from the date of joining or from calender month in which the employee has joined).

2. If an employee has worked for 7 years, out of which in 3 years he has worked for less than 240 days (calculated as per the Act), would he be paid gratuity for 4 year only.

3. For calculating no. of working days as above whether leave days without wages would be considered.

Thanking you in anticipation.

Best Regards

Querist : Anonymous

Querist : Anonymous (Querist)

22 August 2013 Dear Experts,

Kindly reply my above queries especially no. 2 above.

Regards,

Aashok Kumar Sharma

Aashok Kumar Sharma (Expert)
Follow

26 July 2024 Under the Payment of Gratuity Act, 1972, the eligibility and calculation of gratuity are governed by specific provisions. Let’s clarify the doubts related to the minimum working days requirement:

### **1. Calculation of 240 Working Days**

**From Which Date is 240 Days Reckoned?**

- **Starting Point:** The 240 days are calculated based on the financial year, which runs from April 1 to March 31 of the following year.
- **Specifics:** The number of days is not calculated from the date of joining but is considered on a yearly basis according to the financial year.

### **2. Eligibility Based on Working Days**

**If an Employee Has Worked for 7 Years, with Less than 240 Days in 3 Years:**

- **Calculation Basis:** Gratuity is generally calculated based on the continuous service of the employee, regardless of the number of days worked each year.
- **Eligibility:** An employee must have worked for at least 5 years of continuous service to be eligible for gratuity.
- **Impact of 240 Days:** The requirement of 240 days is typically relevant for calculating whether the period is considered full for the purposes of gratuity eligibility. If an employee has worked less than 240 days in a year but has completed 5 years of continuous service, they are generally still eligible for gratuity.
- **Gratuity Calculation:** Gratuity would be calculated based on the total period of service, not just the years where 240 days were worked.

### **3. Calculation of Working Days**

**Whether Leave Days Without Wages are Considered:**

- **Leave Without Wages:** Days of leave without wages are generally not counted towards the calculation of the 240 days.
- **Consideration for Gratuity Calculation:** For the purpose of calculating gratuity, continuous service includes:
- Days actually worked.
- Paid leave.
- Paid holidays.
- Days of authorized leave (with pay).

**Summary of Key Points:**

1. **240 Days Calculation:** The 240 working days are calculated per financial year, not from the date of joining.
2. **Eligibility for Gratuity:** An employee needs to complete at least 5 years of continuous service to be eligible for gratuity, even if some years had less than 240 working days.
3. **Leave Without Wages:** Days of leave without wages are typically excluded from the 240-day count.

### **Additional Points**

- **Continuous Service:** The concept of continuous service means that any break in service should be authorized or permissible under the rules to be considered continuous.
- **Legal Precedents:** For specific cases or detailed application of these rules, consulting legal experts or referring to case laws might be necessary.

If you need further clarification or specific legal advice, consulting a legal expert specializing in employment law or labor laws would be beneficial.

You need to be the querist or approved CAclub expert to take part in this query .
Click here to login now