The 4 Years 240 Days Rule — Explained
The Payment of Gratuity Act requires "5 years of continuous service." The question: if someone works 4 years and 7 months (4 years 210 days), are they eligible?
The Madras High Court and subsequent rulings suggest that when computing years, any year in which an employee has worked for more than 6 months counts as a full year. So 4 years 7 months = 5 years for gratuity purposes.
What "Continuous Service" Means
Continuous service doesn't mean you can never take any leave. It means:
- Sanctioned leaves (casual, medical, earned) count as service
- Lay-off, strike, or lock-out doesn't break continuity
- Job transfer within same organisation maintains continuity
- Maternity leave counts as continuous service
- Resignation and rehire breaks continuity — service resets
Special Cases — Gratuity Despite Less Than 5 Years
| Situation | Gratuity Payable? | Calculation |
|---|---|---|
| Death during service | Yes — to nominee | Normal formula, any tenure |
| Total disability | Yes | Normal formula, any tenure |
| Termination by employer | Yes (if after 1 year) | As per tenure completed |
| Voluntary resignation before 5 yrs | Generally No | — |
| 4 yrs 240+ days (SC ruling) | Contested but likely Yes | As 5 years |
How to Claim Gratuity — Step by Step
- Submit Form I (application for gratuity) to employer within 30 days of leaving
- Employer must acknowledge within 15 days and pay within 30 days of due date
- If employer delays: file complaint with Controlling Authority (Labour Commissioner)
- Nominee claim (death): Submit Form J with death certificate to employer
- If employer disputes amount: Controlling Authority arbitrates
🤝 Calculate Your Gratuity
Use Gratuity Calculator →Q: My employer says I'm not eligible for gratuity. What can I do?
First verify: Has the company had 10+ employees at any time? Have you completed 5 years (or 4 yrs 240 days)? Are you employed on rolls (not contract/third-party payroll)? If all are yes, file a complaint with the Labour Commissioner. Gratuity denial by eligible employers is a criminal offence under the Gratuity Act.
Q: Is gratuity paid if I'm fired?
Yes — if you've completed the required service period (5 years generally), gratuity is due even on termination/dismissal, EXCEPT in cases of termination due to proven misconduct (violence, fraud, etc.) which the employer must prove formally. Ordinary poor-performance termination still entitles you to gratuity.
⚠️ Educational purposes only. Consult a certified financial or legal advisor for personalised guidance.