18/06/2026
๐๐๐ง ๐๐ง ๐๐ฉ๐ฉ๐ซ๐จ๐ฏ๐๐ ๐๐๐ฌ๐๐ง๐๐ ๐๐ซ๐จ๐ฆ ๐๐ฎ๐ญ๐ฒ ๐๐ซ๐๐๐ค ๐๐ง ๐๐ฆ๐ฉ๐ฅ๐จ๐ฒ๐๐โ๐ฌ ๐ ๐ซ๐๐ญ๐ฎ๐ข๐ญ๐ฒ ๐๐ฅ๐ข๐ ๐ข๐๐ข๐ฅ๐ข๐ญ๐ฒ?
Not always. Under the Code on Social Security, absence from duty may still be treated as continuous service for gratuity, if it falls within the legally recognised categories.
Letโs understand this simply.
Gratuity is decided by service continuity, not by perfect attendance. A regular employee usually reaches gratuity eligibility after 5 years, while a Fixed-Term Employee can qualify after 1 year. But the law understands real life. Approved medical leave, maternity leave, earned leave, lay-off periods, or other legally recognised absences do not simply erase an employeeโs service history.
Certain absences cannot be treated as a break in service.
These include:
Medical leave due to sickness or accident, if properly supported
Maternity leave up to the statutory limit
Earned leave, casual leave, or sick leave taken as per policy
Temporary lay-off due to reasons such as shortage of power, raw material, or machinery breakdown
Legal strike or lock-out, where the worker is not personally at fault
Absence caused by an employerโs order that is later regularised or set aside
This is important because employers cannot deny gratuity by casually calling an authorised absence a break in service.
Where the actual number of working days needs to be checked, the law also provides fallback thresholds. In general, 240 days in a 6-day working setup and 190 days in a 5-day working setup may be considered for determining continuous service. Seasonal establishments follow a separate operational-days test.
The financial impact is also higher now. Since gratuity is linked to the revised wage definition under the Labour Codes, wrongly breaking service continuity can lead to serious payout errors and compliance exposure.
For HR and payroll teams, the message is clear:
Leave records matter
Medical and maternity documentation matters
Lay-off and attendance records matter
Gratuity eligibility cannot be denied without proper legal basis
An absence may pause attendance.
It does not always pause service.
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