Can a employer exclude training period from the gratuity

909 votes

I feel your question has two parts: one which asks whether or not period of Training can be excluded for purpose of gratuity, second which seeks to confirm if there is any necessity for completion of 5 years of service or not in order to be eligible for gratuity.
As regards the calculation of period of service for purpose of Gratuity is concerned then an Employer cannot exclude the period of training undergone by the employee unless until it is proved that Period of Training was indeed period of Apprenticeship (which has been expressly excluded for aforementioned purpose from the definition of Employee in view of Section 2(e) Payment of Gratuity Act, 1972)[Indian Rare Earth Limited Versus K.S John & Ors. decided on 11.07.2013, High Court of Kerala and Orissa Mining Corporation Limited Versus Controlling Authority decided on 02.05.1994, Division Bench of Orissa High Court]. The aforementioned Decision of Orissa High Court also struck down a specific Rule calling for exclusion of a "Trainee" from ambit of said Act.
As regards payment of Gratuity is concerned then in order to avail the same an employee has to necessarily serve his employer for a minimum period of 5 years which culminates into continuous service except in case of his death[Section 4 Payment of Gratuity Act, 1972] and it is only upon superannuation, retirement, resignation, death or disablement due to accident or disease that gratuity becomes due.

Advocate Bonny Mehra LawRato

676 votes

Hi,
So far as the law of gratuity is concern the continuous service of 1 year in an organization as described is sufficient to claim gratuity. it all depends whether you have completed your one year service period or not if you have exceeded more than one year of your employment you are eligible for claiming gratuity. the gratuity depends upon the date of joining the service.

Advocate Aditya Saurabh LawRato

673 votes

See an employer can put n no. Of terms or conditions in a contract or its policies
It is the duty of the employee to take a good look at both.

Now if there is not govt. Policy wrt that , that someone may exclude the training period for counting gratuity then they can carry on to do so

And if you have signed to the said policy / agreement.

Advocate Tanu Singhal LawRato