Fixed term contractual employees eligibility for gratuity

vijay
Dear Sir, If someone works more than 5 years with the same company under a yearly contract basis then is he eligible for gratuity or not ?

Reply by LawRato
As per the Payment of Gratuity Act, 1972, an employee who has completed five years of continuous service with an employer is eligible for gratuity. The Act defines "continuous service" as uninterrupted service with the same employer for a period of at least five years.

In your scenario, if an employee has worked for more than five years with the same company on a yearly contract basis and the contract is renewed every year, it is considered as continuous service for the purpose of gratuity. The employee would be eligible for gratuity if he/she satisfies the other eligibility criteria specified under the Act.

It is important to note that the Payment of Gratuity Act applies to establishments with 10 or more employees, and the Act may not apply to all types of employees or establishments.