On this page
The short answer
To make a gratuity claim in Odisha, apply to the employer in writing; it must pay within 30 days, with interest for delay. Gratuity is due after five years' continuous service (no minimum on death or disablement, and pro rata for fixed-term staff) at 15 days' wages for each year. If the employer refuses, apply to the competent authority under the Code on Social Security, 2020, with an appeal within 60 days.
A gratuity claim in Odisha is now made under Chapter V of the Code on Social Security, 2020, which replaced the Payment of Gratuity Act, 1972 when the four labour codes came into force on 21 November 2025. The basic idea is unchanged: an employer must pay a lump sum to an employee who leaves after long service, and if the employer refuses or pays less, the employee applies to a government authority, not to a civil court.
Who must pay gratuity
The gratuity chapter applies to factories, mines, plantations, ports, railway companies, shops and other establishments in which ten or more employees are or were employed on any day in the preceding twelve months. It applies to private companies, banks, schools, hospitals, NGOs and public sector bodies alike.
State and Central government servants whose gratuity is provided by their own pension rules are outside this chapter (Explanation 1 to Section 53). Odisha government employees should look to their pension rules, and service disputes go to the Orissa High Court; see writ petitions.
Gratuity eligibility: the 5-year rule and its exceptions
Under Section 53(1), gratuity is payable when employment ends after at least five years of continuous service, on:
- superannuation or retirement;
- resignation;
- death or disablement due to accident or disease; or
- expiry of a fixed-term contract.
The five-year condition does not apply on death or disablement, or on expiry of a fixed-term employment. Fixed-term employees are paid gratuity pro rata; the Central Government's explanation of the codes states that fixed-term employees become eligible after one year. Working journalists need three years. On death, gratuity goes to the nominee, or to the legal heirs if there is no nomination.
"Continuous service" (Section 54) includes service interrupted by sickness, accident, leave, lay-off, a strike that is not illegal, or a cessation of work not due to the employee's fault. If you did not work the whole year, a year is broadly counted when you actually worked the minimum number of days set in Section 54 (240 days in most establishments).
Gratuity calculation formula
For monthly-paid employees the formula in Section 53(2) and Explanation 3 is:
Gratuity = last drawn monthly wages × 15 ÷ 26 × completed years of service
A part of a year above six months counts as a full year. For example, an employee in Bhubaneswar who leaves after 10 years and 7 months with last monthly wages of ₹30,000 gets ₹30,000 × 15 ÷ 26 × 11 = about ₹1,90,385.
- Wages means basic pay, dearness allowance and retaining allowance. Under the codes' definition, if excluded items such as HRA and other allowances together exceed half of total remuneration, the excess is added back to "wages". This can increase gratuity for employees with a low basic salary.
- Piece-rated employees: the average of the last three months' wages, without overtime.
- Seasonal establishments: seven days' wages for each season.
- Ceiling: the total cannot exceed the amount notified by the Central Government. The ceiling was ₹20 lakh under the 1972 Act; check the amount currently notified under the Code. A contract, settlement or award giving better terms prevails (Section 53(5)).
When gratuity can be withheld or forfeited
Under Section 53(6), gratuity can be forfeited only where the employee was terminated for:
- an act, wilful omission or negligence causing damage or loss to the employer's property (forfeiture only up to the loss caused); or
- riotous or disorderly conduct or violence, or an offence involving moral turpitude committed in the course of employment (wholly or partly).
An employer cannot simply hold back gratuity because notice was not served, because of a pending loan, or because the employee joined a competitor. Those disputes are settled separately.
Gratuity claim in Odisha: step by step
- Apply to the employer in writing. Section 56(1) requires the eligible person (or a nominee or heir) to apply to the employer in the form and within the time set by the rules. Keep a dated copy and proof of delivery. Odisha's rules under the Code may change the forms; ask the labour office which forms now apply.
- The employer must calculate and pay within 30 days. Under Section 56(2) and (3), the employer must determine the amount, tell the employee and the competent authority in writing, and pay within 30 days of the gratuity becoming payable. Late payment carries simple interest at the rate notified by the Central Government.
- If the employer refuses or pays less, send a reminder or legal notice setting out your service period, last wages and the amount claimed.
- Apply to the competent authority. Under Section 56(5), any party can apply to the competent authority to decide the dispute. The employer must deposit the amount it admits. The authority holds an inquiry with the powers of a civil court, hears both sides and directs payment of the amount due, with interest.
- Appeal. A person aggrieved by the order can appeal within 60 days to the appropriate government or the appellate authority it names; another 60 days can be allowed for sufficient cause (Section 56(8)). An employer's appeal is admitted only if it deposits the amount ordered.
- Writ. An appellate order can be challenged in the Orissa High Court at Cuttack on legal grounds.
Controlling authority for gratuity in Odisha
For establishments in the State sphere, the Odisha Government is the "appropriate government". Under the 1972 Act, officers of the Labour Directorate, Odisha (the Labour Commissioner and Divisional and Deputy Labour Commissioners) acted as controlling authorities. Ask the District Labour Office or the Divisional Labour Commissioner for your area which officer is now notified as the competent authority under the Code. Claims against railways, banks, mines, major ports and Central public sector undertakings come under the Central Government's labour machinery, the Chief Labour Commissioner (Central) organisation.
Claims that arose before 21 November 2025 may still be decided under the old Act through the Code's saving provisions. Pending applications before the controlling authority continue.
Documents to keep ready
- Appointment letter, service certificate or relieving letter, and resignation or retirement papers.
- Last salary slips showing basic pay and allowances, and bank statements.
- Form of nomination, if filed, and in a death case, the death certificate and legal heir certificate.
- Copies of your application to the employer and any reply.
Unpaid salary, notice pay and termination disputes are separate claims; see wrongful termination and unpaid salary. Provident fund is handled by EPFO; see PF claims and grievances. If you cannot afford representation, see free legal aid in Odisha. Information on employment matters handled is under civil litigation.
Odia terms used in this guide
| Odia | Transliteration | Meaning |
|---|---|---|
| ଦରମା | darama | salary |
| ଚାକିରି | chakiri | job, employment |
Frequently asked questions
Is gratuity payable if I resign before 5 years?
Generally no. Five years' continuous service is needed on resignation. The condition does not apply on death or disablement, and fixed-term employees get pro rata gratuity, which the Central Government says starts after one year.
What is the gratuity calculation formula?
Last drawn monthly wages (basic plus DA, with allowances above half of pay added back) × 15 ÷ 26 × completed years of service, counting a part-year over six months as a full year, up to the notified ceiling.
How many days does the employer have to pay gratuity?
Thirty days from the date it becomes payable, under Section 56 of the Code on Social Security, 2020. After that, simple interest is payable at the notified rate.
Who is the controlling authority for gratuity in Odisha?
Under the old Act, officers of the Odisha Labour Directorate acted as controlling authorities. Ask the District Labour Office or Divisional Labour Commissioner which officer is now the competent authority under the Code for your establishment.
Can my employer withhold gratuity for not serving notice?
No. Gratuity can be forfeited only if you were terminated for causing loss to the employer's property (up to that loss), or for riotous or violent conduct or an offence involving moral turpitude in the course of employment.
Is there a time limit to claim gratuity?
Apply to the employer promptly in the form the rules set. The Code allows appeals within 60 days of the authority's order, extendable by 60 days. Do not delay an application to the authority.
Official sources
- Code on Social Security, 2020 (India Code PDF)
- Ministry of Labour and Employment: labour codes
- PIB: explainer on the four labour codes (November 2025)
- PRS Legislative Research: Social Security (Central) Rules, 2026
- Labour Directorate, Government of Odisha
General information, not legal advice. Every matter turns on its own facts and documents, and the law and official procedures change. Check the current position with the concerned office, or take advice on your own facts, before acting.