# Do you get gratuity after resignation in Punjab? > Yes, after a year. Section 159 of the Punjab Labour Code 2026 pays 30 days' remuneration a year when the job ends from either side, except for gross misconduct. - Topic: Workplace - Court: Statute - Citation: Punjab Labour Code 2026 s.159 - The myth: "If you resign, you get no gratuity." Verdict: Wrong in Punjab: section 159 gives gratuity when the job ends from either side, after a year. - Watch: https://failegal.site/media/gratuity-after-resignation-punjab-labour-code-2026 (video https://failegal.site/media/gratuity-after-resignation-punjab-labour-code-2026/reel.mp4, 1:07) - Published by FAI Legal on 2026-11-15 Yes. In Punjab, "you resigned, so no gratuity" is wrong. Section 159 of the Punjab Labour Code 2026 says that on termination of an employment agreement "by either party, except in the case of gross misconduct, after a year of continuous service", the employee is entitled to "a gratuity equal to 30 days' remuneration for every year of service". A resignation is a termination by the employee (section 146(1)(d)), so it counts. If the company does not pay, the Payment of Wages Authority hears claims for unpaid gratuity, provident fund, notice pay and leave encashment (section 293), and the claim must be made within three years of the date the money was due (section 338). ## Key points - Section 159: after a year of continuous service, gratuity is due when the job ends "by either party", resignation included. The one exception is gross misconduct. - The amount: 30 days' remuneration for every year of service, at the last month's pay for a fixed-rated employee; after the first year, "after completion of the first year of service with the same establishment, the period of service exceeding six months shall be treated as full year". - It applies to establishments with 20 or more workers (section 159(1)); section 160 limits it for very high salaries. - Resign with 30 days' written notice, or 30 days' pay instead (section 150(2)). - Unpaid gratuity, provident fund, notice pay and leave encashment go to the Payment of Wages Authority (section 293), within three years (section 338). ## Do you get gratuity after resignation? The short answer fawad.m92 asked what the law says when a company does not clear gratuity, provident fund and final settlement. The commonest excuse is "you resigned, so no gratuity". In Punjab that is wrong: after a year of continuous service, the Labour Code gives gratuity when the job ends from either side, unless the employee was terminated for gross misconduct. ## What section 159 of the Punjab Labour Code says Section 159(2), in its own words: "On termination of an employment agreement by either party, except in the case of gross misconduct, after a year of continuous service, the employee or, in case of his death, his heirs, shall be entitled to a gratuity equal to 30 days' remuneration for every year of service, unless more favourable terms have been agreed". "Either party" covers both the employer ending the job and the employee's resignation: section 146(1)(d) lists "resignation by the employee" as one of the ways an employment agreement ends. "Unless more favourable terms have been agreed" means a contract may give more, never less. ## How gratuity is calculated in Punjab Thirty days' remuneration for every year of service. For a fixed-rated employee the remuneration is the last month's; for a piece-rated employee it is the highest pay drawn in the last twelve months. After the first year, "after completion of the first year of service with the same establishment, the period of service exceeding six months shall be treated as full year": six years and seven months count as seven years. So with a last salary of Rs 60,000 and seven counted years, the gratuity is seven months' salary: Rs 4,20,000. ## Who is left out: under 20 workers, and very high salaries Section 159(1): "This section does not apply to establishments in which less than 20 workers are engaged." Section 160 caps gratuity by salary: up to five times the monthly minimum wage, it is uncapped and payable on termination by either party other than for gross misconduct; above ten times the minimum wage, it is payable on redundancy or retrenchment only, at most six months' remuneration. Section 160(3) keeps any gratuity rights accrued under the earlier law. ## How to resign the right way Section 150(2): "An employee may terminate the employment agreement by resignation with a written notice of 30 days to the employer or paying last drawn 30 days remuneration as compensation in lieu thereof." Give the notice in writing and keep a copy. ## Company not paying? How to claim gratuity and final dues The Payment of Wages Authority hears "all claims" arising out of underpayments, deductions and "non-payment of dues relating to the provident fund or gratuity, bonus, overtime, leave encashment, notice pay or travelling allowance or any other emoluments payable under any law or delay in the payment of remuneration" (section 293). The application "shall be presented within three years from the date on which ... the payment of the remuneration was due to be made" (section 338(3)); a later one can be admitted for sufficient cause (338(4)). A lawyer, a trade union official or an inspector can apply for you (338(2)). If the company says it is in losses: the Supreme Court said on 2 September 2025 that "the non-payment of gratuity has nothing to do with losses or financial crunch". Our reel on that ruling: failegal.site/media/company-not-paying-gratuity-losses-no-excuse-2025. ## Ask FAI Legal We read every section above in FAI Legal's Statute Search. FAI Legal is a website: open failegal.site in your phone's browser, ask in plain words and get the exact section. Our October explainer on who counted as a workman under the old Standing Orders is here: failegal.site/media/gratuity-private-employees-pakistan-workman-2021-scmr-1785; for Punjab, the Labour Code 2026 has replaced that rule. ## The case at a glance - **Facts:** An employee resigns after several years; HR says that because he resigned, there is no gratuity. A follower asked what the law says when a company does not clear gratuity, provident fund and final settlement. The reel's people are drawn; there is no real case. - **The question:** In Punjab, does an employee who resigns get gratuity, how much, and how is unpaid gratuity claimed? - **What the Court held:** Yes, after a year of continuous service: section 159 gives 30 days' remuneration a year on termination by either party, except gross misconduct, in establishments of 20 or more workers, with limits for very high salaries (section 160). Unpaid dues go to the Payment of Wages Authority within three years (sections 293 and 338). - **Why:** Each rule is in the Code's own words: section 159(1) and (2), section 146(1)(d) on resignation, section 150(2) on notice, section 293 on the Authority, section 338 on the time limit. - **Limits:** No court ruling on the new Code is cited: it is new. The Code is Punjab's; other provinces have their own laws. FAI's copy is an OCR text; the middle tier of section 160 is unreadable there, so it is not described. Whether a particular dismissal was for gross misconduct depends on its facts. ## The law it relies on - **Punjab Labour Code 2026, Sections 159 and 160:** Section 159(2) (as FAI's Statute Search shows it): "On termination of an employment agreement by either party, except in the case of gross misconduct, after a year of continuous service, the employee or, in case of his death, his heirs, shall be entitled to a gratuity equal to 30 days' remuneration for every year of service, unless more favourable terms have been agreed"; proviso: "after completion of the first year of service with the same establishment, the period of service exceeding six months shall be treated as full year". Section 159(1): not for establishments with less than 20 workers. Section 160: limits for high salaries. - **Punjab Labour Code 2026, Sections 146 and 150:** Section 146(1)(d): resignation by the employee ends the agreement. Section 150(2): "An employee may terminate the employment agreement by resignation with a written notice of 30 days to the employer or paying last drawn 30 days remuneration as compensation in lieu thereof." - **Punjab Labour Code 2026, Sections 293 and 338:** Section 293: the Payment of Wages Authority hears claims for "non-payment of dues relating to the provident fund or gratuity, bonus, overtime, leave encashment, notice pay or travelling allowance or any other emoluments payable under any law or delay in the payment of remuneration". Section 338(3): within three years of the date the payment was due. ## What this does not mean - It does not mean every workplace pays gratuity: section 159 applies where 20 or more workers are engaged, and very high salaries are limited (section 160). - It does not cover Sindh, Khyber Pakhtunkhwa or Islamabad: they have their own labour laws. - It does not excuse gross misconduct: a termination for gross misconduct carries no gratuity under section 159. - It does not cancel rights earned before the Code: section 160(3) keeps gratuity rights accrued under the earlier law. ## Questions people ask ### In Punjab, do you get gratuity if you resign? Yes, after a year of continuous service. Section 159 of the Punjab Labour Code 2026 gives gratuity on termination by either party, except gross misconduct, in establishments of 20 or more workers. ### How is gratuity calculated in Punjab? Thirty days' remuneration for every year of service, at the last month's pay for a fixed-rated employee. After the first year, service over six months counts as a full year (section 159). ### Is gratuity mandatory in Pakistan? In Punjab, yes, for establishments with 20 or more workers, after a year of service (section 159); section 160 limits it for very high salaries. Sindh, Khyber Pakhtunkhwa and Islamabad have their own laws. ### Where do I complain if my company does not pay my gratuity? To the Payment of Wages Authority, which hears claims for unpaid gratuity, provident fund, notice pay and leave encashment (section 293). ### How long do I have to claim unpaid gratuity? Three years from the date the payment was due (section 338(3)); a later claim can be admitted for sufficient cause (338(4)). ## Sources - Punjab Labour Code 2026, s.159, s.160, s.146, s.150, s.293, s.338 (text checked in FAI Statute Search, 15 November 2026) - Supreme Court of Pakistan, C.P.L.As. Nos. 573-K to 575-K of 2023, 2 September 2025, para 5 (full text read in FAI's archive; covered by reel 82) ## What the reel says Resigned, so no gratuity? You asked (@fawad.m92): what does the law say when a company won't clear gratuity, provident fund and final settlement? Punjab's new Labour Code 2026: 1. Section 159: after a year of continuous service, when the job ends from either side, resignation or termination, you get gratuity. The one exception is gross misconduct. 2. Thirty days' pay (your last month's) for every year of service, and after the first year, over six months counts as a full year. This applies where 20 or more people work, and very high salaries have limits (section 160). 3. Resign with 30 days' written notice, or 30 days' pay instead (section 150). 4. Not paid? Apply to the Payment of Wages Authority: it hears claims for gratuity, provident fund, notice pay and leave money (section 293). You have three years (section 338). Sindh, Khyber Pakhtunkhwa and Islamabad have their own laws. Full story: failegal.site/media/gratuity-after-resignation-punjab-labour-code-2026 Should someone who resigns get gratuity too? Reply yes or no. --- Educational legal information, not legal advice. Every case turns on its own facts. Speak to a lawyer about your own case. Last checked: 15 November 2026. Review status: Pending advocate review. English: https://failegal.site/media/gratuity-after-resignation-punjab-labour-code-2026 ยท Urdu: https://failegal.site/media/ur/gratuity-after-resignation-punjab-labour-code-2026 FAI Media is part of FAI Legal (https://failegal.site), research on Pakistani statutes and judgments. Free to watch and read.