Is an Employee Entitled To Gratuity for a Year in Which He Works For Less Than 240 Days

The question of entitlement of gratuity for not working for at least 240 days in a year is very common in labour law issues in India. Before going to discuss further on this, we need to first understand the basic of the Payment of Gratuity Act, 1972 which was enacted in Parliament in 1972. Section 2(c) of the Act was amended by Act No.26 of 1984 with effect from 11.02.1981. The definition of “continuous service” came into effect by virtue of the said amendment made in the Payment of Gratuity Act.

The term “continuous service” under the Payment of Gratuity Act, 1972 has been defined as follows:

“An employee shall be said to be in continuous service for a period if he has, for that period been in uninterrupted service, including service which may be interrupted on account of sickness, accident, leave, absence from duty without leave (not being absence in respect of which an order treating the absence as break in service has been passed in accordance with the standing orders, rules or regulations governing the employees of the establishment), lay off, strike or a lockout 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.”

The characteristic of 240 days has to be considered in the light of the definition of “continuous service”. In view of the above definition, absence from duty without leave is treated as continuous service except in cases specially mentioned in Section 2A i.e. absence in respect of which a punishment has been imposed on the employee or an order treating such absence as break in service. Only in case of break in service the days of 240 days is to be taken into consideration in calculating the quantum of gratuity. However, break in service cannot be presumed without termination and without reappointment orders.

Obviously, in case of permanent employee it is almost insignificant to take into consideration the 240 days of actual work.

As per the term “continuous service” period of leave should be included for monthly rated salary workmen for the purpose of continuous service. Even break in service due to strike without any fault of employee will not affect the continuous service of any employee. Moreover, mere absence from duty without obtaining leave for which punishment of fine has been imposed will not result in break in continuity of service. So we may easily conclude that the concept of 240 days may have relevance in case of casual employees but practically it has no relevance in case of regular employees or permanent employees as question of counting 240 days will only arise when there is break in their services and not otherwise.

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