Whether Gratuity from Group Gratuity Fund Can Be Disbursed To the Employees after Completion of Five Years of Service

Are there any provisions under the labour laws in India for making payment of gratuity from the Gratuity Group Fund to the employees who have completed five years of service but yet in employment?

The Payment of Gratuity Act, 1972 is applicable to the establishment where ten or more persons are employed. Under Section 4(1) of the said Act, gratuity is payable to the employee on the following circumstances upon completion of not less than five years of continuous service:

a. Superannuation of an employee; or
b. On retirement or resignation; or
c. On his death or disablement due to accident or disease;

Gratuity is payable only on occurrence of any of the above situation not otherwise subject to the fulfillment of the provisions of the Act. Under the provisions of the Payment of Gratuity Act, 1972 there is no scope to make payment of gratuity with each month’s salary as the said Act was enacted for providing social security of the employees in future.

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