Gratuity is a kind of retirement savings for employees. It is given after working for a long time in a company. The general rule is that if you work at least five years continuously, you get gratuity. But according to the new rule, gratuity money will not be available even after 5 or 10 years of service. The 4 main reasons for this change are as follows:

Company with less than 10 employees:
Gratuity X applies to all companies, shops, factories and other establishments that employ 10 or more people. But if the company has 10 employees and the company or establishment is not registered under the Gratuity Act, the employees will not come under the purview of gratuity X. In such a situation, employees will not get its benefit. However, if the company wants to give gratuity voluntarily, it can be given. In such a situation, the formula for calculation of gratuity may be different. The gratuity amount is equal to half a month salary. But the number of working days in a month is considered 30 days instead of 26.

Serious misconduct or indiscipline:
If an employee is found guilty of damage to the company’s property, committing violence or any other serious misconduct, the company has full right to stop gratuity. This decision is valid under the Gratuity Act 1972. In such a situation, the company can refuse to give you gratuity, whether you have served 5 years or 10 years in the company.

Case of fraud or misuse:
If an employee is found guilty of fraud, misuse or any kind of criminal activity, his gratuity eligibility will end. In such a situation, not only gratuity, but the company can also take legal action against you.

Big financial loss to the company:
If any of your action or negligence causes a big financial loss to the company, the company can completely stop the gratuity amount. This provision has been made to encourage employees to take and work seriously and to work.

The company has to give evidence:
To prevent the gratuity of an employee, the company must first give evidence and reasons. Whatever the reason, the company will have to give a show cause notice to the first employee. Then, there will be a hearing between the two sides. If the employee is found guilty, the gratuity amount will be stopped.

What is the general rule of gratuity?
According to the rules, if the company is registered under the Gratuity Act, then the employee who served continuously for 5 years is considered to be the eligible of gratuity. Even if the employee has worked in the company for 4 years 8 months, his service is considered to be 5 years and the gratuity is given at 5 years. However, if he has done less than 4 years 8 months, his service is considered 4 years. In such a situation, he will not get gratuity.