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Eligibility of gratuity & sabatical leave
Human Resources » Compensation & Benefits

Chrm Message From: shubhas Total Posts: 1 Join Date: 19/08/2009
Rank: Beginner Post Date: 19/08/2009 10:42:10 Points: 5 Location: India


I have completed 4 yrs of service in the IT industry and if I take a leave of 6-8 months without pay in the remaining 1 year out of 5 years,will I be eligible for gratuity after working for another 6 months in the final year?

Chrm Message From: Jyoti Rani Total Posts: 65 Join Date: 19/08/2009  
Rank: Manager Post Date: 20/08/2009 07:47:13 Points: 325 Location: India
Hi Shubhas,

Good question, i checked with my circle, they say you won't be eligible for gratuity with 6 -8 months of  leave without pay.
I would request CHRM fraternity to share the facts if available to enlighten us further on this.

Chrm Message From: t_sampath Total Posts: 23 Join Date: 19/08/2009  
Rank: Executive Post Date: 20/08/2009 12:50:59 Points: 115 Location: India
Hi Shubhas,

I would like to share the following  information on Gratuity.

Can a service of 4 years 10months and 11days constitute 5 years continuous service ?

"Yes, by virtue of the judgment of Supreme Court rendered under the provisions of the Industrial Dispute Act in Surendra Kumar Verma vs. Central Govt. Industrial Tribunal,[(1980) (4) S.C.C.433)], it is enough that an employee has a service of 240 days in the preceding 12 months and it is not necessary that he should have completed one whole year’s service. As the definition of continuous service in Industrial Dispute Act and Payment of Gratuity Act are synonymous, the same principal can be adopted under the act also and hence an employee rendering service of 4 year 10months 11days is considered to have completed 5 years continuous service under sec.4(2) and thereby is eligible for gratuity."



Pl. note that I got this information in a Law Book (Bare Act,2004) i.e. The Payment of Gratuity Act,1972 (Publisher: Law Publishers () Pvt.Ltd. 18A-S.P.Marg,Post Box-1077,Allahabad-211 001. Phone:623735,623741 Fax-0532-622276. email: ; website:


Hope this will be of useful to you.

Chrm Message From: savi989 Total Posts: 70 Join Date: 19/08/2009  
Rank: Manager Post Date: 20/08/2009 13:50:29 Points: 350 Location: India

According to my past experience where we have handled similar case.

An employee was on sabbatical leaves for 4 months on his resignation while hi settlements sabbatical period was taken as part of his total stint with the company & was treated continuous service only & accordingly eligible amount of gratuity was paid to him.

Generally LWP is considered as continuous service only and sabbatical leave is kind of LWP with consent of management.

I would request CHRM group members to share their thoughts on this.


Chrm Message From: rkuppili Total Posts: 115 Join Date: 19/08/2009  
Rank: Leader Post Date: 21/08/2009 10:32:58 Points: 575 Location: India

Hi Shubas,

I checked it at my end. Got to know that you wont be eligible.


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