Gratuity (also known as severance pay) describes a payment to which the employee is legally entitled, provided certain conditions are met. It is not possible to contract out of this entitlement. Gratuity is part of the so-called end-of-service benefits, i.e. of all rights that an employee can claim upon termination of the employment relationship. In addition to gratuity, the employee might be entitled to, among other benefits, compensation for overtime and unused leave, outstanding salary and in rather rare cases also damages.
