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CS Professional · Labour Laws and Practice · Social Security Legislations

Arjun, a regular employee of a Pune manufacturing establishment covered by the Code on Social Security, 2020, dies in an accident after 3 years of continuous service. His wife is his nominee. Is gratuity payable?

Gratuity is payable to the nominee. The five-year continuous service requirement does not apply when service ends by the employee's death or disablement, so Arjun's three years do not bar his wife's claim as nominee.

  1. AYes, gratuity is payable to the nominee because the five-year service condition does not apply on deathCorrect
  2. BNo, because Arjun had not completed five years of continuous service
  3. CYes, but only if the employer has more than 100 employees
  4. DNo, gratuity is payable only to the employee personally and lapses on death

Explanation

Gratuity normally requires five years of continuous service, but this condition is relaxed where the employee dies or becomes disabled. Arjun's nominee is therefore entitled to it. The option that applies the five-year rule rigidly ignores this exception.

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