Gratuity applicability when break in service

The law has recognized for break in service for Payment of Gratuity Act, 1972 and the break in service is verified by section 2 (A) of Payment of Gratuity Act, 1972.

Section 2 (c) of Payment of Gratuity Act, 1972 as amended in year 1984, defines the expression “continuous service” as defined in section 2 (A) of the Act.  Under that section, an employee is said to be in “continuous service” for a period if he has, for that period, been in uninterrupted on account of 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-offs, strike or 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 the Payment of Gratuity Act, 1972.

In one case, the Hon’ble High Court of India has held that no deduction can be made from gratuity even if employee was occupying quarter.

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