GRATUTY IMPPRTANT FOR GOVERNMENT KARMCHARI
Gratuity is a defined benefit plan given by the employer to the employee for rendering services continuously for five years or more. It is a monetary benefit usually given at the time of retirement. But there are certain rules that make an employee eligible to receive gratuity before the age of retirement or superannuation.
According to the Payment of Gratuity Act, 1972, an employee is eligible to receive gratuity if he has rendered continuous service for at least five years with an organisation. This gratuity is payable to the employee:
a) On his superannuation, or
b) On his retirement or resignation
However, there is an exception where the condition of working continuously for five years with an organisation is not applicable.
If an employee's services are terminated due to his death or has become disabled due to an accident or a disease, an employer is mandated by law to pay gratuity to him or his nominee/legal heir, as the case maybe, irrespective of the number of years of continuous service.
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