#Gratuity calculation

The Allahabad High Court has ruled that continuous ad-hoc service, when later regularized without any break, must be counted toward qualifying service for gratuity under the U.P. Retirement Benefit Rules, 1961. This clarifies a critical entitlement for thousands of state employees whose initial appointments were temporary but later formalized, ensuring fair computation of retirement benefits.

The Allahabad High Court has ruled that service rendered as a daily wager must be included in gratuity calculations once the employee is regularized, aligning with the Supreme Court’s holding in Netram Sahu. This decision protects thousands of informal workers whose long-term service was previously disregarded, reinforcing that regularization erases the distinction between temporary and permanent tenure for statutory benefits.

The Himachal Pradesh High Court has ruled that daily wage service must be fully counted toward the five-year qualifying period for gratuity under the Payment of Gratuity Act, 1972, affirming that regularization does not erase prior service. This sets a critical precedent for informal and contractual workers across India, ensuring their entire tenure - even if initially on daily wages - is protected under statutory welfare rights.

The Madhya Pradesh High Court has ruled that an employee’s period treated as 'dies non' - where no wages are due but service is uninterrupted - must still be counted toward qualifying service under the Payment of Gratuity Act. This ensures that reinstated employees are not penalized for administrative delays or procedural technicalities, safeguarding their statutory right to full gratuity based on cumulative tenure.

Kerala High Court holds that employers must pay gratuity exceeding ₹20 lakh if provided under a superior contractual scheme, reinforcing Section 4(5) of the Payment of Gratuity Act.

Madhya Pradesh High Court holds that dearness allowance must be included in wage calculation for gratuity under Section 2(s) of the Payment of Gratuity Act, 1972.