Suresh Pipes Pvt. Ltd (SPPL) manufactures all types of pipes which are used for residential and commercial complexes. The SPPL is registered under Factories Act, 1948. The company's plant is located in the VKI Industrial

Payment of Gratuity Section 4(1) of the Payment of Gratuity Act, 1972 provides that Gratuity shall be payable to an employee on the termination of his employment after he has rendered continuous service for not less than five years, - on his superannuation, or on his retirement or resignation, or on his death or disablement due to accident or disease: In terms of Section 2(e) of the Payment of Gratuity Act, 1972 "employee" means any person (other than an apprentice) who is employed for wages, whether the terms of such employment are express or implied, in any kind of work, manual or otherwise, in or in connection with the work of a factory, mine, oilfield, plantation, port, railway company, shop or other establishment to which this Act applies, but does not include any such person who holds a post under the Central Government or a State Government and is governed by any other Act or by any rules providing for payment of gratuity. Further, Section 2A of the Payment of Gratuity Act, 1972 lays down that 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), lay-off, 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. Where an employee (not being an employee employed in a seasonal establishment) is not in continuous service, for any period of one year, he shall be deemed to be in continuous service under the employer 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- 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 two hundred and forty days, in any other case. Thus, in accordance with the above-mentioned provisions, Anurag can claim the gratuity from the employer under the Payment of Gratuity Act, 1972. Amount of Gratuity Section 4(2) of the Payment of Gratuity Act, 1972 states that for every completed year of service or part thereof in excess of six months, the employer shall pay gratuity to an employee at the rate of fifteen days' wages based on the rate of wages last drawn by the employee concerned. Explanation to Section 4(2) states that in the case of a monthly rated employee, the fifteen days' wages shall be calculated by dividing the monthly rate of wages last drawn by him by twenty-six and multiplying the quotient by fifteen. Section 4(3) further provides that the amount of gratuity payable to an employee shall not exceed such amount as may be notified by the Central Government from time to time. In the given case, Anurag has served in the publication house for 4 years and 9 months, hence he is entitled to get the gratuity under section 4(1)(b) read with section 4(2) of the Payment of Gratuity Act, 1972. Anurag has served for 4 years + 9 months are to be rounded off to one year = total 5 years. Calculation of gratuity amount Gratuity = Last drawn salary * (15/26) * Number of years of service [(50,000*15)/26] *5 = ₹ 1,44,230.76/- round off to ₹ 1,44,231/- Since the maximum amount of gratuity payable is up to ₹ 10 lakh as per notification of the Central Government, hence in this case Anurag will get ₹ 1,44,231/-.