Companies offer gratuity amount to their employees. An employee gets the benefit of gratuity after working in a company for a fixed period. If he leaves or changes the job before the predetermined period, he will not get the benefit. In such a situation, the question often arises whether the gratuity rules are different for government and private sector employees. The answer to this is that whether you are a government employee or work in the private sector, gratuity rules are the same for everyone.
Earlier this month, Allahabad Court ruled that if an employee wants to retire after 60 years or retires at 62. Then he will get the benefit of gratuity in both the forms. Many companies did not give the benefit of gratuity to the employee because the employee had opted for retirement at 62 years.
What is gratuity?
Gratuity is a special amount that a company gives to its employees. When an employee works in the same organization for five years, he is eligible for gratuity. All government and private employees get the benefits of the scheme. The Payment and Gratuity Act applies to all companies, factories, mines, ports and railways in the country.
When does the employee receive the gratuity amount?
Employees become eligible to receive gratuity after working for five years in an organization. In some cases this limit is lower. According to Section 2A of the Gratuity Act, if an employee works in an underground mine, he can avail the benefit of gratuity after completing four years and 190 days. Whereas in other organizations gratuity is given after four years and 240 days. The benefit of gratuity is available after leaving the job or retirement. Cannot avail of this benefit while on the job.
