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Unit 7: The Payment of Gratuity Act, 1972

by the employee is fixed in the contract or conditions of service as the age on the attainment of Notes
which he has to leave the employment where there is no such provision, then attainment of the
age of 58 years by the employee.

5. Continuous Service
According to Section 2A, for the purposes of this Act:
(1) An employee shall be said to be in continuous service for a period if he has, for that period
been in uninterrupted service, including service which may be interrupted on account of sickness,
accident, leave, absence from duty without leave (not being absence in respect of which an order
treating the absence as break in service has been passed in accordance with the standing orders,
rules or regulations governing the employees of the establishment), layoff, strike or a lock-out
or cessation of work not due to any fault of the employee, whether such uninterrupted or
interrupted service was rendered before or after the commencement of this Act;
(2) Where an employee (not being an employee employed in a seasonal establishment) is not in
continuous service within the meaning of clause (1) for any period of one year or six months, he
shall be deemed to be in continuous service under the employer:
(a) for the said period of one year, if the employee during the period of twelve calendar months
preceding the date with reference to which calculation is to be made, has actually worked under
the employer for not less than:
(i) one hundred and ninety days in the case of an employee employed below the ground in a
mine or in an establishment which works for less than six days in a week; and
(ii) two hundred and forty days in any other case;
(b) for the said period of six months, if the employee during the period of six calendar months
preceding the date with reference to which the calculation is to be made, has actually worked
under the employer for not less than:
(i) ninety five days, in the case of an employee employed below the ground in a mine or in an
establishment which works for less than six days in a week; and

(ii) one hundred and twenty days in any other case;
Explanation: For the purpose of clause (2), the number of days on which an employee has
actually worked under an employer shall include the days on which:

(i) he has been laid-off under an agreement or as permitted by standing orders made under the
Industrial Employment (Standing Orders) Act, 1946, or under the Industrial Disputes Act, 1947,
or under any other law applicable to the establishment;
(ii) he has been on leave with full wages, earned in the previous year;
(iii) he has been absent due to temporary disablement caused by accident arising out of and in
the course of his employment; and
(iv) in the case of a female, she has been on maternity leave; so however, that the total period of
such maternity leave does not exceed twelve weeks.

(3) Where an employee, employed in a seasonal establishment, is not in continues service
within the meaning of clause (1) for any period of one year or six months, he shall be deemed to
be in continuous service under the employer for such period if he has actually worked for not
less than seventy-five per cent, of the number of days on which the establishment was in operation
during such period.
Service is not continuous, in case of legal termination of service and subsequent reemployment.

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