Seasoned HR and IR professionals, and even advisors (not of late), have been enamoured by the aspect of entitlement of gratuity and the interpretation of the provisions laying out the same under the Payment of Gratuity, 1972 (“Gratuity Act”). Their qualms, as becomes conspicuous from discussions that have been taking place across forums and groups, are fixated on the question of what exactly constitutes “continuous service of 5 years” for an employee to become eligible for the payment of gratuity. According to them, this aspect becomes even more confusing with respect to employees who, having completed 4 years of service with the establishment, leave after rendering another 240 days of service in their 5th year of service. Whether these 240 days of service constitute “continuous service” of one year under the provisions of the Gratuity Act almost always emerges out as the sticky wicket out of these discussions. This article attempts to set forth on a humble endeavour to put a rest to this quagmire.
For first-principles, section 4 of the...
