Payment of gratuity act

This query is : Resolved

Querist : Anonymous

Querist : Anonymous (Querist)

25 September 2010 An employee who work on yearly contract basis for six years,The contract laps every year and new contract is made every year,is he entitle to receive gratuity.

Ajay Mishra

Ajay Mishra (Expert)
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30 September 2010 Dear Friend

Applicability of Payment of Gratuity Act to Contract Labor
I have the following views on the Payment of Gratuity Act 1972.
a) whether gratuity act is applicable to contract labour
b) whether it is applicable to fixed tenure contractual appointments

In my view a plain reading of the Act shows that in both above cases it is not applicable.This is because Contract labour is not in the employment of the Contractor.They are only Contract labour as defined under the Contract labour Act which gives them special status under the Contract labour Act and hence are eligible only for the benefits specified under the Contract Labour Act which are PF & ESI/Workmen's compensation only.They are not eligible for gratuity,or bonus.

As regards tenure contractual appointments they are also not eligible for gratuity for the reason that the events on the occurrence of which gratuity is payable under the Act are
1.Resignation
2)Retirement
3)Death
4)Superannuation
5)Termination

Now expiry of tenure of employment is not a defined occurence for payment of gratuity and therefore it would not be payable.

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