In today’s time, people are rapidly changing jobs for better salary and career growth. But many times, in the pursuit of a new job, employees lose a big financial benefit, which is gratuity. Now after the implementation of the new labor codes, the discussion about changing the rules regarding gratuity has intensified. In such a situation, the biggest question is that if an employee leaves the job before completion of 5 years, will he get gratuity or not?
The rules for gratuity in the new labor codes, especially the Social Security Code, have been simplified in some cases. Now employees working on fixed term employment i.e. contract will not need to wait for 5 years. Such employees can get the benefit of gratuity even after only 1 year of continuous service. This change will especially benefit gig workers, contract staff and those working in short-term employment sectors. The aim of the government is to provide social security to as many employees as possible.
5 year rule is still applicable for permanent employees
However, this rule does not apply to all employees. For those employees who are doing permanent job in any company, the old rule is still applicable for them. That means, to get gratuity, they will have to work continuously in the same company for at least 5 years. If an employee leaves the job before completion of 5 years, then under normal circumstances he does not get gratuity. However, this condition is relaxed in cases like death or permanent disability of the employee.
What is the 4 years 240 days rule?
Many people do not know that there is a special provision in the Gratuity Act. According to experts, if an employee has completed 4 years and has worked for at least 240 days in the fifth year, then he can also be considered eligible for gratuity. This rule has also been recognized by many courts. Madras High Court, while giving its verdict in a case, had said that an employee working 240 days in the fifth year will be considered as a full year and he will get gratuity.
Keep these things in mind before leaving the job
Experts say that before changing jobs, employees should preserve their appointment letters, salary slips and attendance records. These documents help prove your continuous service.
SK Sharma is a content writer who writes on news, entertainment, and lifestyle topics. She has over four years of experience and is known for conveying information in simple and clear language.
