Entitlement of Gratuity for work done for 4 years and 240 days under Gratuity law in India

As per Section 2A of the Gratuity Act, “continuous service” for one year in a non-seasonal industry means uninterrupted service for at least 240 days in that year. In counting uninterrupted service, interruption of service due to sickness, accident, leave, absence from duty without leave (unless an order is passed treating the absence as a break in service), lay-off, lawful strike or lock-out, or cessation of work without any fault of the employee, are not to be deducted and shall be counted as part of uninterrupted service. Therefore, if a workman has put in uninterrupted service for 4 years and 240 days, as per Gratuity law in India, he will be considered to have completed 5 years of continuous service and will be eligible for gratuity on termination of his service on account of superannuation, retirement, resignation, death or disability. An identical view is taken by Madras High Court in the following judgement –

In Mettur Beardsell Ltd. (represented by its Personnel Manager), Madras V/s Regional Labour Commissioner (Central) (Authority under Payment of Gratuity Act), Madras & Others, 1998 it was held as follows – “Section 2A of the Gratuity Act defines continuous service. According to this section, if an employee renders continuous service for a period of 240 days in a year he will be deemed to have continued in service for one year. This deeming provision contained in Section 2A must be applied in interpreting the period of five years mentioned in Section 4(1). Section 2(b) of the Gratuity Act also supports this interpretation because as the said section completed year of service means continuous service for one year. Therefore these provisions are emphatic in stating that if the employee services continuously for a period of 240 days in a year, he must be deemed to have continuously served for one year.”

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