What is Continuous service?

Definition

Continuous service is a statutory measure of how long somebody has actually worked, counted in days worked rather than in elapsed calendar time. It is what gratuity eligibility and retrenchment protection are tested against.

How it works

The reason it exists is that elapsed time and worked time diverge: somebody on the rolls for fourteen months with long unpaid gaps may have worked fewer days than somebody on the rolls for eleven. The statutes therefore count days, with defined inclusions for periods such as authorised leave.

What it means in India

Section 25B of the Industrial Disputes Act 1947 defines continuous service and provides that a workman who has worked for a specified number of days in the preceding twelve months is deemed to have been in continuous service for a year, which is where the widely quoted figure of two hundred and forty days comes from. The Payment of Gratuity Act 1972 has its own definition in section 2A for gratuity purposes. The two are related in spirit and separate in text, so use the definition belonging to the act you are applying.

What people get wrong

• Treating "240 days" as a rule about leave or about confirmation. It is a test of continuous service under the Industrial Disputes Act.
• Applying the Industrial Disputes Act definition to a gratuity question. The Payment of Gratuity Act has its own.
• Structuring employment as repeated short engagements to keep somebody below the threshold, a pattern that has been examined closely by Indian courts.

Terms this one depends on

More on employment and exit

Where this shows up in practice

Almost everything on this page ends up as a line on a payslip or a figure in a register. Shiftelio keeps attendance, leave, salary structure and the statutory deductions in one place, so the number in the letter and the number in the payslip come from the same record.