This Act may be cited as the Payment of Gratuity Act, No of , and (a) shall be entitled to the payment of a gratuity under section 2, in a sum equiva-. An Act to provide for a scheme for the payment of gratuity to employees . 2 Substituted by the Payment of Gratuity (Amendment) Act, ( An Act to provide for a scheme for the payment of gratuity to employees by any other Act or by any rules providing for payment of gratuity;.
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The Payment of Gratuity Act (The Payment of Gratuity (Amendment) Act, ) provides for the payment of gratuity to employees engaged in industries. BILL further to amend the Payment of Gratuity Act, BE it enacted by Parliament in the Sixty-eighth Year of the Republic of India as follows. Read about gratuity in India, rules under the gratuity act, including relevant recipients, how to calculate cost, and other payment and tax.
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January Learn how and when to remove this template message In India gratuity is a type of retirement benefit. It is a payment made with the intention of helping an employee monetarily after his retirement. It was held by the Supreme Court of India in Indian Hume Pipe Co Ltd v Its Workmen , that the general principal underlying gratuity scheme is that by service over a long period the employee is entitled to claim a certain amount as retirement benefit.
The act came in force on 16 September Application and extent The act applies to the whole of India. But according to section 1 2 , in so far it relates to plantation or ports, it shall not be extended to State of Jammu and Kashmir.
The act applies to all factories, mines, oilfield, plantation, port and railway company. But in case of shops or establishments other than those stated before, it applies to those organisations with 10 or more persons are employed on any day of the preceding 12 months.
Under Section 1 3-A , if in case of any shop and establishment to which the act applies the number of employee reduces below 10, it shall continue to be governed by the act irrespective of the number of employee's.
Thus no employer can escape liability under this act by reducing the number of employee's. On the employee choice gratuity payable to him can be distributed amongst the nominees. If employee has family members before making nomination, Nominees should be from his family members only.
Gratuity Act Pdf Download
If employee has no family members before making nomination, Nominees can be any other person who he likes. Nominees as the other persons become in valid if the employee acquires family members in the future time. Employee can make changes in nominees. Change of name of nominees should be intimated to employer by employee. When gratuity becomes payable and if no application received from employee, employer should give notice of payment of gratuity to the employer and also to the controlling authority specifying the amount of gratuity so determined.
The employer should arrange to pay the amount of gratuity within 30 days from the date it becomes payable to the person to whom the gratuity is payable. If the amount of gratuity payable is not paid by the employer within the 30 days , the employer shall pay, from the date on which the gratuity becomes payable to the date on which it is paid, simple interest at such rate, not exceeding the rate notified by the Central Government.
The Payment of Gratuity Act, 1972
Provided that no such interest shall be payable if the delay in the payment is due to the fault of the employee and the employer has obtained permission in writing from the controlling authority for the delayed payment on this ground.
If there is any dispute in payment of the gratuity, employer should deposit the gratuity payable amount with controlling authority until the dispute is settled by him. Once the dispute is settled by the controlling authority, the deposited amount with him will be paid to employee.
Any person in dispute is not satisfied with decision order made by the controlling authority, within 60 day from the date of order by controlling authority, appeal to the appropriate Government or the appellate authority.
For admitting the appeal by the employer to the appellate authority, employer should deposit the amount equal to the amount of gratuity with the appellate authority. The appropriate Government may, by general or special order, define the area to which the authority of an Inspector so appointed will extend. Where two or more Inspectors are appointed for the same area, appropriate Government also provide, by such order, for the distribution or allocation of work to be performed by them under this Act.
Every Inspector shall be deemed to be a public servant within the meaning of section 21 of the Indian Penal Code, Inspectors can enter and inspect at all reasonable hours with his assistants who are government servants, any premises or place in any factory, mine, oilfield, plantation, port, railway company, shop or other establishment for the purpose of examining any register, record or notice or other document required to be kept or exhibited in relation to the payment of gratuity to the employees.
Inspector can examine the employer or employee concern to the gratuity matters. In case any offence is committed by employer under this act, inspector can seize all register, record, notice or other document as he may consider relevant in respect of that offence.
The Payment of Gratuity Act, 1972
Inspector has the power to search and seize with the warrant under criminal code procedure. On receipt of such application by the controlling authority issue a certificate fro the amount to the collector fro the recovery of the amount with compound interest.
But the interest amount payable should not exceed the amount of gratuity payable. Complaint should be made by controlling authority to magistrate court within 15 days from the date of the authorization by government to the controlling authority.
The main purpose and concept of gratuity is to help the workman after the retirement, whether the retirement is a result of the rules of superannuation or physical disability or impairment of the vital part of the body.
Gratuity is the amount which is not connected with any consideration and has to be considered as something given freely for the service the employee has rendered to the organization for more than 5 years.
Any establishment employing 10 or more persons as may be notified by the Central Government. Once Act applies, it continues to apply even if employment strength falls below In Regional Provident fund Commissioner v.
The High Court of Karnataka held that the said establishment falls within the definition of an establishment under tThe Payment of Gratuity Act, and the employee was entitled to gratuity, nowwithstanding the fact that he resign the job.
Primary Teachers Association v. The operation of this judgment was, however, suo motu stayed by the Court just two days after the pronouncement of the judgment.
The Court noted in that order that it was not apprised of the amendment brought to the Act by the Parliament in It is for this reason, we prima facie find error in the judgment and, therefore, are inclined to stay the operation of our judgment dated This amendment was given a retrospective effect from April of However, the said issue was no longer res integra after the statutory amendment.
In case of period of one year Employee will be treated as he in continuous service, if he is employed by employer for the period of days employment under the ground in mines, or in establishment which works less than 6 days in a week.
In case of period of 6 months Employee will be treated as he in continuous service, if he is employed by employer for the period of 95 days employment under the ground in mines, or in establishment which works less than 6 days in a week. Section- 4. Use of Form. Gratuity Form I.
Application for the payment of gratuity.
Gratuity Form J. Used by the nominee to make application for payment of gratuity. Gratuity Form K. Used by legal heir to make application for the payment of gratuity. Gratuity Form F. To make nomination. Gratuity Form G.
To make fresh nomination. Gratuity Form H. Modification of nomination. Gratuity Form L.
Issued by the employer to employee stating amount and date of payment. Gratuity Form M.January Learn how and when to remove this template message. The main purpose and concept of gratuity is to help the workman after the retirement, whether the retirement is a result of the rules of superannuation or physical disability or impairment of the vital part of the body.
Issued by the employer stating the reason for the rejection of gratuity. CG Ajay Babu. At the risk of redundancy, we may state that the requirement of the statute is not the proof of misconduct of acts involving moral turpitude but the acts should constitute an offence involving moral turpitude and such offence should be duly established in a court of law.
The act applies to the whole of India.