Can i get gratuity if i work for 4 yrs 8 months but not 5 yrs?

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I am an emplyee in an organization. I will complete 4 Years and 7 months this January. Just wanted to know if I am eligible to get Gratuity if I leave after 4 Years and 7 months. I do not want to lose my gratuity, and at the same time I want to switch job as soon as possible.

Thanks

Sanjay

Replies (10)

No you are not eligibile to get the gratuity without completing 5 years of services

 

If you have completed 4 yrs and 240 days (8 months) in 5th year then you are eligible to claim gratuity.

Clarity between gratuity eligibility service (5 or 4.8 yrs)?

The gratuity eligibility service as per Gratuity Act 1972 is 5 years.

But as per the judgment from Supreme Court below and the quotation from the book quoted below it seems that the gratuity eligibility service is 4 years 240 days.

"Judgment from Supreme Court:

"Yes, by virtue of the judgment of Supreme Court rendered under the provisions of the Industrial Dispute Act in Surendra Kumar Verma vs. Central Govt. Industrial Tribunal,[(1980) (4) S.C.C.433)], it is enough that an employee has a service of 240 days in the preceding 12 months and it is not necessary that he should have completed one whole year’s service. As the definition of continuous service in Industrial Dispute Act and Payment of Gratuity Act are synonymous, the same principal can be adopted under the act also and hence an employee rendering service of 4 year 10months 11days is considered to have completed 5 years continuous service under sec.4(2) and thereby is eligible for gratuity."

Quotation from the book:

Law Book (Bare Act,2004) i.e. The Payment of Gratuity Act,1972 (Publisher: Law Publishers () Pvt.Ltd. 18A-S.P.Marg,Post Box-1077,Allahabad-211 001. Phone:623735,623741 Fax-0532-622276.website: lawpublishersindia.com

1. 4 years and 6 months (190 days = 1 year) where the company follows 5 day a week.

2. 4 years and 8 months ( 240 days = 1 year) where the company follows 5 day a week.

Is eligible for gratuity.The payment of gratuity ( second amendment) act, 1984 clarifies this. One needs to calculate the no of years and service completion as follows.

A company which follows 5 day week

Doj 1.05.2000 -

01.05.2000 to 30.04.2001 - worked for 190 days
01.05.2001 to 30.04.2002 - worked for 190days

If we go by the above formula and if the person does not have any break in service he will be eligible for gratuity on 01.11.2004 "

Non clarity of this rule has created confusion among a lot of employees. As some hear that some companies are following the 4 years 240 days rule, while some follow the 5 year rule. Please help remove this confusion so that nobody rights of gratuity are being compromised on. 

Why is gratuity multiplied by 15?

If any employee dies in about 4 years and 6 months of giving his service to a particular organization then what will be the treatment of gratuity? Will it still be payable?

Upon Death of the employee irrespective of number of years of service, Gratuity is payable.

Even if the employee just completed about a year in an organization? Is gratuity also payable in this case?

According to the law, the Gratuity amount is only payable to those employees who have completed 5 years working in the same organization. As per gratuity law, if you have worked less than 5 years, whether it's 1 month or 1 day you cannot claim the amount of gratuity. After five years you can easily get an abroad job. To get a job abroad you need an sop for visa. This sop helps you get visa easily by any county you choose for your next job.

As per the Payment of Gratuity Act, 1972, Gratuity is generally payable to an employee who has completed five continuous years of service with the same employer. However, it's crucial to note that the Act considers any service period exceeding six months in a year as a full year. In your case, completing 4 years and 8 months may be considered as completing 5 years for gratuity eligibility. It's advisable to review your limited vs unlimited contract and consult with your HR department to ensure accurate information tailored to your specific situation. Labor laws can vary, and it's essential to consider any amendments or specific provisions that may apply.

Gratuity eligibility is based on the length of continuous service. If you complete at least one year of service, you are entitled to a gratuity payment, and the calculation increases with additional years. However, to receive the full gratuity entitlement (including the maximum rate for the final years), you typically need to complete five full years of service.

In your case, having worked 4 years and 7 months, you are eligible for a gratuity payout based on the years you completed, but it will not be the maximum rate available for employees completing five or more years. For more details about gratuity calculations and eligibility, you can refer to this comprehensive guide on limited and unlimited contracts. It’s also advisable to confirm the exact calculation with your HR or consult labor laws directly.

according to UAE Labour Law If a worker has served for more than 1 year but less than 5 years, he is entitled to full gratuity pay based on 21 days' salary for each year of work. 

In the UAE, the entitlement to gratuity is based on the duration of your employment and the type of contract you have. According to the UAE Labor Law, you are eligible to receive gratuity if you have completed at least one year of service with your employer. In your case, with 4 years and 7 months of service, you are indeed entitled to receive gratuity.

Since your service duration exceeds 1 year, you will receive gratuity for the full duration of your employment, including the 4 years and 7 months. However, the exact amount will depend on whether you have a limited or unlimited contract.

Here’s how the gratuity calculation typically works for employees with an unlimited contract:

  • 21 days of basic salary for each year of service during the first 5 years.
  • 30 days of basic salary for each subsequent year after that.

Since you are leaving before completing 5 full years, your gratuity will be prorated for the 4 years and 7 months you've worked.

If you'd like to better understand how to calculate your exact gratuity or explore other important labor law updates, feel free to check out our detailed guides on UAE Labor Law and the Gratuity Calculator on UAE Labour Law. We cover everything from gratuity calculations to your rights when leaving a job.


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