The term “Full Service Year” means continuous service for ONE year.

An employee is said to have rendered continuous service if:

  1. Has been in continuous service, including service interrupted by illness, accident, absence from duty with or without leave, layoff, strike or lockout, or termination of employment through no fault of the employee. [Note: if an employee having been superannuated is re-employed by the employer without any break in service, he will be eligible for payment of service]
  2. In the case of a non-seasonal mine or establishment working less than SIX days a week, you have actually worked for at least 190 days [in Mine] during the period of TWELVE months or 95 days, during the previous SIX months, it will be considered that he has rendered continuous services for a period of ONE year or SIX months, respectively.
  3. In the case of any other non-seasonal establishment where you have actually worked at least 240 days during the previous 12 months or 120 days during the previous SIX months, you will be deemed to have provided continuous service for a period of ONE year or SIX months. , respectively.
  4. In the case of a seasonal establishment, having actually worked at least 75% of the days the establishment was in operation.

For these purposes, a worker will be considered to have worked on a day in which:

  1. You have been fired by virtue of an agreement or in accordance with the regulations in force;
  2. Has been on leave of absence with full salary, earned in the previous year;
  3. You have been absent due to a temporary disability caused by an accident arising out of and in the course of your employment, and
  4. In the case of the woman, she has been on maternity leave not exceeding TWELVE weeks.

To better explain it, we have compiled a list of frequently asked questions along with the answers.

FAQ-1 Natasha joined ABC Limited on June 2, 2003. She was on maternity leave from September 1, 2006 to March 31, 2007. After giving birth to her baby, she decided to take a one-year break. She rejoined the company on April 1, 2008. She finally resigned on September 15, 2011. Will she be entitled to the tip?

Reply: NO, she is not entitled to Free. Although she joined the company on June 2, 2003, she took a break of ONE year. After rejoining the company on April 1, 2008, she did not complete the required minimum continuous service of FIVE years and was therefore not entitled to the bonus. Her second period with the company will be considered as a new job.

In this case, for the calculation of eligibility, you must consider the following:

  1. Was he on the company roster during his one-year break?
  2. Have you been paid during your break?

If, and only if, her answer to both questions is yes, then only she will be entitled to the bonus and her bonus will be calculated over EIGHT years.

FAQ – 2 Ramesh joined XYZ Limited on July 11, 2005, resigned on June 1, 2010. Under the terms and conditions of his employment, he is required to serve a notice period of TWO months. Will he be eligible for the bonus if-

Scenario – 1 Do you comply with the entire notice period?

Scenario – 2 Do you comply with a month’s notice?

Scenario – 3 He is relieved on the day of his resignation?

Reply – For purposes of calculating continuous services of FIVE years, their seniority must be considered until the last business day. The resignation date becomes irrelevant. In the first scenario, you will be entitled to a bonus payment because you will be completing your FIVE years of continuous service on July 10, 2010, while your last business day will be July 31, 2010.

In the second and third scenarios, Ramesh will be eligible to receive a bonus. According to a judgment of the Madras High Court in a case of Mettur Beardsell Limited [represented by its Personal Manager]Madras v Regional Labor Commissioner [Central Authority under the Payment of Gratuity Act, 1972]Madras, it has been established that if an employee has rendered continuous service for 240 days in the fifth year of service, for the purpose of calculating bonus, it should be considered as having completed FIVE years of continuous service.

FAQ – 3 Nitin joined MNO Limited on October 10, 2009. On August 13, 2012, while driving back from the office, he had an accident and died. Will his family be entitled to Gratuity?

Reply – In accordance with Section 6 of the Payment of Gratuities Act of 1972, it will not be necessary to complete a continuous service of FIVE years when the termination of employment of any employee is due to death or disability. Therefore, Nitin’s family will be entitled to the payment of his tip.

If the employee has a family, you must designate one or more family members and no one else. However, if the employee has no family, he may nominate any person or persons of his choice. In addition, if the employee acquires a family after nominating a person or persons of her choice, such nomination becomes invalid and the employee must make a new nomination of one or more members of her family.

FAQ – 4 Meera joined ABC Limited on February 21, 2006. During the years 2009 and 2010, she held NRI status due to her frequent travels to the US, Germany and the UK for the execution of various projects and assignments in name of ABC Limited. She resigned on March 13, 2012. Will she be entitled to Gratuity?

Reply- Yes, you will be entitled to Gratuity. Her NRI status and her frequent trips to foreign countries do not disqualify her. He has remained in continuous service with ABC Limited since joining in February 2006.

FAQ – 5 ABC Limited, an Indian company, hired Robert as Business Development Manager on September 11, 2007 for the North American market. He is a US citizen and resides in New York. He resigned on May 6, 2014. Is Robert entitled to a tip?

Reply- Robert is not entitled to Free. He is working in the US, therefore Indian labor laws will not apply to him. Benefits under the Gratuities Payment Act 1972 apply to those persons who are employed by Indian companies to work in India. Travel to different countries for business development or execution of projects or assignments during the course of employment will be considered continuous employment.

We hope this information is useful.

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