According to the Payment of Gratuity Act, 1972, under what circumstance is the completion of five years of continuous service not mandatory for payment of gratuity to an employee by his employer ?
Explanation & Strategy
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Under Section 4 of the Payment of Gratuity Act, gratuity is normally payable after 5 years of continuous service. However, the Second Proviso to S.4(1) creates an exception: the 5-year requirement is WAIVED when termination is due to DEATH or DISABLEMENT of the employee. This humanitarian exception ensures the family receives gratuity regardless of service length.