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I have worked for 4.1 years. As per various references, particularly the Madras High Court judgment, an employee is eligible for gratuity. However, kindly provide guidance with respect to the new judgment by M/S Alvas Institute vs. The State of Karnataka. The Supreme Court of India has held that the Madras High Court judgment in the case of M. Rajagopal vs. Union Bank of India (2014) is no longer valid. In the recent case of M/s Alvas Institute vs. The State of Karnataka (2022), the Supreme Court held that the Payment of Gratuity Act, 1972, clearly states that an employee is eligible for gratuity only after completing 5 years of continuous service. The Court further held that the Madras High Court judgment was wrongly decided and should not be followed. Please confirm whether the Madras High Court judgment, which states 4 years and 240 days of continuous service makes an employee eligible for gratuity, is still correct or wrongly decided.
The recent Supreme Court judgment in the M/S Alvas Institute vs. The State of Karnataka case overrules the Madras High Court ruling. According to the new judgment, an employee is only eligible for gratuity after completing 5 years of continuous service. Therefore, the Madras High Court judgment stating eligibility after 4 years and 240 days is no longer valid. For further legal assistance contact us on our helpline number.