One of my clients recently had a case which I am explaining below and if you are stuck in such similar situation, here is what to do.
Note: Due to attorney-client privilege, I cannot disclose complete case details or identify the actual parties involved. However, I am sharing the essential facts and legal approach so that if you find yourself in a similar situation, you can understand the available solutions and legal remedies.
TL;DR: Gratuity eligibility under the Payment of Gratuity Act, 1972 requires five years of continuous service, and the 190-day or 240-day rule only decides what counts as one year of that service. It does not shorten the five-year requirement. If you are let go before the five-year mark, you are usually not entitled to gratuity, but you may still be entitled to retrenchment compensation, notice pay and leave encashment, and you should ask for the reason for separation in writing.
The calendar invite arrived on a Tuesday morning with a subject line that said nothing useful. Ankit Deshpande, a systems engineer with an IT services company in Pune, opened it assuming it was a sprint review. His manager and someone from HR were already on the call. The words used were "role redundancy" and "restructuring", and the meeting was over in twelve minutes.
He had joined on 2 May 2022. The company ran a five-day week, Monday to Friday. HR gave him three choices for a last working day: 30 September, 31 October or 30 November 2025, and asked him to confirm one by email. He asked, twice, whether gratuity would be paid. Nobody gave him a straight answer, which is a large part of why he ended up in a lawyer's office at all.
A general practice lawyer he consulted first told him to sign the full and final settlement and move on. That advice did not sit right. He then approached the Chamber of Advocate Sudhir Rao, and Advocate Sudhir Rao and his office went through the appointment letter, the payslips and the HR emails line by line.
The finding was unwelcome but clear: on any of those three dates he had not crossed five years of service, so gratuity was not payable. What had been left out of the settlement offer was the statutory retrenchment component. Once it was pointed out in writing, the employer released retrenchment compensation, pay in lieu of notice and full leave encashment. Advocate Sudhir Rao's work in employment and service matters helped secure the corrected settlement in the client's favour.
Key Facts of the Case
- Date of joining was 2 May 2022; the three proposed last working days all fell in 2025, well inside four years of service.
- The employer worked a five-day week, Monday to Friday, which matters for how a "year" is counted under the Payment of Grat