Question

According to the Payment of Gratuity Act, 1972, under what circumstance is the completion of five years of continuous service not mandatory for payment of gratuity to an employee?

• A. Voluntary resignation by the employee
• B. Dismissal of the employee due to misconduct
• C. Death or disablement of the employee due to accident or disease
• D. Transfer of the employee within the same organisation

Hint:

In case of death or permanent disablement, gratuity becomes immediately payable—service length does not matter.

Answer 1

The Correct Option is C

Step 1: Understanding the five-year rule.
Generally, an employee must complete 5 years of continuous service to be eligible for gratuity.
Step 2: Exception under Section 4(1).
If an employee dies or becomes disabled due to accident or illness, gratuity must be paid even if the service period is less than five years.
Step 3: Why other options are wrong.
Resignation or dismissal does not exempt the employee from the five-year requirement.