Gratuity
A statutory lump-sum payment made by an employer to an employee on termination after a qualifying period of continuous service.
In Simple Terms
A one-time payment an employer owes a long-serving employee when they leave, retire, or pass away.
Detailed Legal Meaning
Gratuity is payable to an employee on the termination of employment (by superannuation, retirement, resignation, death, or disablement) after they have rendered continuous service for a statutorily prescribed minimum period, calculated according to a formula based on last-drawn wages and years of service.
Relevant Acts & Sections
- Payment of Gratuity Act, 1972Search on India Code ↗