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Frequently Asked Questions

A curated and categorised database of common questions regarding the law.

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ELIGIBILITY

1 What is gratuity ?

Gratuity is a lump sum amount that your employer pays you when you retire or resign from the organization.

An Employee does not contribute any portion of his salary towards this amount.

Gratuity is paid out at the time of superannuation (if you retire at the age of 58), when you retire (at any other age) or resignation, and in the event of your death or being rendered disable because of an accident or illness. In the event of your death, the gratuity will be paid to your nominee.
2 What is gratuity ?

Gratuity is a lump sum amount that your employer pays you when you retire or resign from the organization.

An Employee does not contribute any portion of his salary towards this amount.

Gratuity is paid out at the time of superannuation (if you retire at the age of 58), when you retire (at any other age) or resignation, and in the event of your death or being rendered disable because of an accident or illness. In the event of your death, the gratuity will be paid to your nominee.
3 To whom does the Gratuity act apply ?

The Payment of Gratuity Act extends to the whole of India and is applicable to all factories, mines, oilfields, plantations, ports, railway companies and any establishments where 10 or more persons were employed on any day of the preceding 12 months and every Shop and Establishment of that State, in which 10 or more persons are employed, or were employed on any day in the preceding 12 months.
Every employee irrespective of his wages is entitled to receive gratuity if he has rendered continuous service of 5 years or more than 5 years.
4 To whom does the Gratuity act apply ?

The Payment of Gratuity Act extends to the whole of India and is applicable to all factories, mines, oilfields, plantations, ports, railway companies and any establishments where 10 or more persons were employed on any day of the preceding 12 months and every Shop and Establishment of that State, in which 10 or more persons are employed, or were employed on any day in the preceding 12 months.
Every employee irrespective of his wages is entitled to receive gratuity if he has rendered continuous service of 5 years or more than 5 years.
5 When does an employee become eligible for gratuity?

Gratuity is applicable to a permanent employee who completes 5 years of continuous service with the organisation. After the ruling of Madras High Court an employee is deemed to have completed 5 years if he has completed 240 days of service in the 5th year.
6 When does an employee become eligible for gratuity?

Gratuity is applicable to a permanent employee who completes 5 years of continuous service with the organisation. After the ruling of Madras High Court an employee is deemed to have completed 5 years if he has completed 240 days of service in the 5th year.
7 What is 'continuous service' ?

An employee shall be said to be in continuous service for a period if he has, for that period, been in uninterrupted service and includes service which may be interrupted on account of sickness, accident, leave, absence from duty without leave, lay off, strike or a lock-out or cessation of work not due to any fault of the employee, whether such uninterrupted or interrupted service was rendered before or after the commencement of this Act.

Where an employee is not in continuous service for any period of one year or six months, he shall be deemed to be in continuous service under the employer:

if for the said period of one year he has worked for one hundred and ninety days in the case of an employee employed below the ground in a mine or in an establishment which works for less than six days in a week and two hundred and forty days in any other case;
if for the said period of six months has actually worked under the employer for not less than ninety-five days in the case of an employee employed below the ground in a mine or in an establishment which works for less than six days in a week and one hundred and twenty days, in any other case;
The number of days on which an employee has actually worked under an employer shall include the days on which:
he has been laid-off under an agreement or as permitted by standing orders made under the Industrial Employment (Standing Orders) Act, 1946 or under the Industrial Disputes Act, 1947 or under any other law applicabLE to the establishment;
he has been on leave with full wages earned in the previous year;
he has been absent due to temporary disablement caused by accident arising out of and in the course of his employment and
in the case of a female, she has been on maternity leave; so, however, that the total period of such maternity leave does not exceed twelve weeks.
In case of employees in seasonal establishments he shall be deemed to be in continuous service for any period of one year or six months if he has actually worked for not less than seventy-five per cent of the number of days on which the establishment was in operation during such period.
8 What is 'continuous service' ?

An employee shall be said to be in continuous service for a period if he has, for that period, been in uninterrupted service and includes service which may be interrupted on account of sickness, accident, leave, absence from duty without leave, lay off, strike or a lock-out or cessation of work not due to any fault of the employee, whether such uninterrupted or interrupted service was rendered before or after the commencement of this Act.

Where an employee is not in continuous service for any period of one year or six months, he shall be deemed to be in continuous service under the employer:

if for the said period of one year he has worked for one hundred and ninety days in the case of an employee employed below the ground in a mine or in an establishment which works for less than six days in a week and two hundred and forty days in any other case;
if for the said period of six months has actually worked under the employer for not less than ninety-five days in the case of an employee employed below the ground in a mine or in an establishment which works for less than six days in a week and one hundred and twenty days, in any other case;
The number of days on which an employee has actually worked under an employer shall include the days on which:
he has been laid-off under an agreement or as permitted by standing orders made under the Industrial Employment (Standing Orders) Act, 1946 or under the Industrial Disputes Act, 1947 or under any other law applicabLE to the establishment;
he has been on leave with full wages earned in the previous year;
he has been absent due to temporary disablement caused by accident arising out of and in the course of his employment and
in the case of a female, she has been on maternity leave; so, however, that the total period of such maternity leave does not exceed twelve weeks.
In case of employees in seasonal establishments he shall be deemed to be in continuous service for any period of one year or six months if he has actually worked for not less than seventy-five per cent of the number of days on which the establishment was in operation during such period.
9 Can an employee claim Gratuity even before completion of 5 years?


Yes, An employee or nominees can claim gratuity even before completion of 5 years in followings cases: Death or Disablement
10 Can an employee claim Gratuity even before completion of 5 years?


Yes, An employee or nominees can claim gratuity even before completion of 5 years in followings cases: Death or Disablement
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