payment of gratuity Act Applicability


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22 October 2017 Mr. A, On 01/01/2018 started his business by opening a shop employing 3 employees. On the incremental demands of shop he added 10 new employees on 01/06/2023. On 01/09/2023 one of the employee employed on 01/01/2018 leaves the shop. Will this employee get gratuity or not? And from which date payment of gratuity act 1972 is applicable for above shop?

22 October 2017
1. Applicable if Shop & establishment where 10 or more persons were employed in any day in last 12 months.
So it’s applicable in your case from 01/06/2023. Subsequent reduction is of no consequences on applicability.
2. For non-seasonable establishment, employee in continuous service of 1 year & he worked for not less than 240 days is eligible for gratuity.

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22 October 2017 Suppose the employee leaving service has complied with the condition that you mentioned in point 2. Is the amount of gratuity calculated from 01/01/2018(commencement of his service) or 01/06/2023(commencement of the Act)?


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