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Gratuty rules for continue 5 year service with same employer


25-Jun-2025 (In Labour & Service Law)
I joined a large private company on 1st July 2020 as a project fellow 6 month and continue with same employer till July 31 2025 as I will resign , Total complete 5 years .During joinning as a project fellow I receive all compensation like medical EPF bonus hra etc . My question is is this Project fellow period will be consider under gratuty 5 years continuous rule?
Answers (1)

Answer #1
585 votes
Yes, your period of employment as a Project Fellow from 1st July 2020 is likely to be considered part of the continuous service for the purpose of gratuity under the Payment of Gratuity Act, 1972, provided there was no break in service and you remained under the same employer until 31st July 2025. The Act defines continuous service to include uninterrupted employment, even if the nature of the appointment or designation changes, so long as the employee continues to work under the control and supervision of the employer and receives wages or compensation. In your case, since you were paid all regular employee benefits such as medical coverage, EPF, HRA, and bonus from the beginning of your engagement as a Project Fellow, this indicates that you were treated as a regular employee rather than a trainee or consultant. If your service has been unbroken throughout the five-year period and you were not disengaged and reappointed afresh, you would satisfy the statutory requirement of five years of continuous service as per Section 4(1) of the Gratuity Act. Unless there is a specific contractual clause or HR policy stating that the Project Fellow period was not part of regular employment, your full tenure from 1st July 2020 to 31st July 2025 should be counted for gratuity. If any issue arises, you may rely on your appointment letters, salary slips, and PF contributions to establish continuity and employee status.
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Priya
Thank you for your details clarification and explain details .

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