Payment of Gratuity Act-1972

PAYME MENT NT OF GR GRA ATUI UITY TY ACT, 1972 1972 An Act to provide for a scheme for the payment of gratuity to  employees engaged in factories, mines, oilelds, plantations, ports, Railway companies, shops or other establishments

Applicability of thi Act   (a) every factory, mine, oileld,

plantation, company;

port

and

railway

  (b) every shop or establishment within the meaning of any law in which ten or more persons  persons  are employed, or were employed, on any day of the preceding twelve months;

Applicability of thi Act   (c) such other establishments or class of establishments, in which ten or more employees are employed,, or were employed, on employed any day of the preceding twelve months, as the Central Government may, by notication, specify in this behalf !"i#$ applicatio%& O%ly co%#itio%'  co%#itio%'  1( o) *o)$ $*ploy$$+

Applicability' Applicabilit y' if No& of $*ploy$$ )$#c$#!nce this Act is applied to a shop or establishment "t shall continue to be governed by this Act #ven if the number of persons employed gets reduced at a later date

E*ploy$$ any person (other (other than an apprentice apprentice)) employed on wages, in any establishment, factory, mine, oileld, plantation, port, railway company or shop, shop, to do any s$illed, semi%s$illed, or uns$illed, manual, supervisory, technical or clerical wor$, whether the terms of such employment are e&pressed or implied and

E*ploy$$ but does not include  include   any such person who holds a post under the Central Government or a 'tate Government and is governed by any other Act or by any rules providing for payment of gratuity

Retirement and superannuation Retirement *$a%

t$)*i%atio% of th$ $).ic$ of a% $*ploy$$ oth$)/i$ tha% o% p$)a%%atio%0 $*ploy$$ , *$a% superannuation i% )$latio% to a% $*ploy$$, th$ attai%*$%t by th$ $*ploy$$ of ch a$ a i fi$# i% th$ co%t)act o) co%#itio% of $).ic$ a th$ a$ o% th$ attai%*$%t of /hich th$ $*ploy$$ hall .acat$ th$ $*ploy*$%t&

Wages all $*ol*$%t /hich $*ol*$%t /hich a)$ $a)%$# by a% $*ploy$$ /hil$ o% #ty o) o% l$a.$ i% acco)#a%c$ /ith th$ t$)* a%# co%#itio% of hi $*ploy*$%t a%# /hich a)$ pai# o) a)$  payabl$ to hi* i% cah a%# i%cl#$ #$a)%$ i%cl#$  #$a)%$ allo/a%c$ 3UT 4OE5 NOT INC6U4E a%y bo% a%y bo%,, co**iio%, ho$ )$%t allo/a%c$,, o.$)ti*$ /a$ a%# allo/a%c$ /a$ a%# a%y oth$) allo/a%c$

Fa*ily family, in relation to an employee, shall be deemed to consist of   in the case of a male employee, employee , himself, his wife, his children, whether married or unmarried, his dependent parents the dependent parents of his wife and the widow and children redeceased son, if an

of

his

Fa*ily in the case of a female employee, employee , herself, her husband, her children, whether married or unmarried, her dependent parents and the dependent parents of her husband and  he widow and children of her predeceased son, if any

Ca% a#opt$# chil#)$% b$co*$ fa*ily *$*b$)   *here the personal law of an employee permits the adoption by him of a child, any child lawfully adopted by him shall be deemed to be included in his family, and where a child of an employee has been adopted by another person and such adoption is, under the personal law of the person ma$ing

Who is eligible for fo r gratuity and when? G)atity hall b$ payabl$ to a% $*ploy$$ o% th$ t$)*i%atio% of hi $*ploy*$%t aft$) h$ ha )$%#$)$# co%ti%o $).ic$ fo) %ot l$ tha% fi.$ y$a),' y$a),' !a+ o% hi p$)a%%atio%, o)  !b+ o% hi )$ti)$*$%t o) )$i%atio%, o)  !c+ o% hi #$ath o) #iabl$*$%t!fi.$ #iabl$*$%t! fi.$ y$a) $).ic$ %ot )$8i)$#+ )$8i)$#+ #$ to acci#$%t o) #i$a$

Who should get if employee dies? in the case of death of the employee, employee , gratuity payable to him shall be paid to his nominee or,   if no nomination has been made, to his heirs, and where any such nominees or heirs is a minor, the share of such minor shall be deposited with the controlling authority (ie government o+cer)  o+cer)   who shall invest the same for the benet of such minor in such ban$ or other nancial institution, as may be prescribed, until such minor attains maority

G)atity to #iabl$# $*ploy$$  co*pti% th$ )atity payabl$ to a% $*ploy$$ /ho i )$'$*ploy$#, aft$) hi #iabl$*$%t, o% )$#c$# /a$, hi /a$ fo) th$ p$)io# p)$c$#i% hi #iabl$*$%t, hall b$ ta$% to b$ th$ /a$ )$c$i.$# by hi* #)i% that p$)io#, a%# hi /a$ fo) th$ p$)io# b$8$%t to hi #iabl$*$%t hall b$ ta$% to b$ th$ /a$ a o )$#c$#

A*o%t of G)atity' ho/ *ch Fo) $.$)y co*pl$t$# y$a) of $).ic$ o)  pa)t th$)$of i% $c$ of i *o%th, th$ $*ploy$) hall pay )atity to a% $*ploy$$ at th$ )at$ of fift$$% #ay: /a$  ba$# o% th$ )at$ of /a$ lat #)a/%  by th$ $*ploy$$ co%c$)%$#

;o/ to Co*pt$ /a$ fo) G)atity to Pi$c$ )at$# $*ploy$$ I% th$ ca$ of a pi$c$ )at$# $*ploy$$, #aily /a$ hall b$ co*pt$# o% th$ a.$)a$ of th$ total /a$ )$c$i.$# by hi* fo) a p$)io# of th)$$ *o%th  i**$#iat$ly p)$c$#i% th$ t$)*i%atio% of hi $*ploy*$%t,  a%#, fo) thi p)po$, th$ /a$ pai# fo) a%y o.$)ti*$ /o) hall %ot b$ ta$% i%to acco%t !i% a pi$c$ )at$# yt$* th$)$ *ay %ot b$ th$ co%c$pt of baic, 4A, ;RA, CCA $tc&+

Co*ptatio% of G)atity fo) $*ploy$$ i% $ao%al $*ploy*$%t

i% th$ ca$ of a% $*ploy$$ /ho i $*ploy$# i% a $ao%al $tablih*$%t a%# $tablih*$%t a%# /ho i %ot o $*ploy$# th)ohot th$ y$a),  th$ $*ploy$) hall pay th$ )atity at th$ )at$ of $.$% #ay: /a$ fo) $ach $ao%

;o/ to calclat$ )atity $8al to 1< #ay /a$

I% th$ ca$ of a *o%thly )at$# $*ploy$$, th$ fift$$% #ay: /a$ hall b$ calclat$# by #i.i#i% th$ *o%thly )at$ of /a$ lat #)a/% by hi* by t/$%ty'i a%# *ltiplyi% th$ 8oti$%t by fift$

%$ Mai** li*it o% G)atity The amount of gratuity payable to an employee shall not exceed Rs.3,5 0,000 f there is an award, agreement or contract !or higher amount of gratuity t is allowed.

"mployer to initiate calculation and notice of payment

A%y p$)o% $liibl$ to )$c$i.$ )atity hall *a$ a% applicatio% to applicatio% to th$ $*ploy$) fo)  pay*$%t of th$ a*$ /ithi% th$ p)$c)ib$# ti*$& "h$th$) a% applicatio% i *a#$ o) %ot th$ $*ploy$) hall #$t$)*i%$ th$ a*o%t payabl$ a%# i.$ %otic$ to th$ $liibl$ p$)o%= a%# to Th$ co%t)olli% atho)ity 5p$cifyi% th$ a*o%t of )atity #$t$)*i%$#

Ti*$ Ti*$ li*it fo) pay*$%t of )atity Th$ $*ploy$) hall a))a%$ hall  a))a%$ to pay th$ a*o%t of )atity /ithi% thi)ty #ay f)o* #ay  f)o* th$ #at$ it b$co*$ payabl$ If %ot pai# /ithi% th$ p$)io# tiplat$# abo.$ $*ploy$) i liabl$ to pay i%t$)$t fo) i%t$)$t  fo) th$ #$lay$# pay*$%t I%t$)$t i %ot payabl$ if payabl$  if th$ #$lay /a ca$# #$ to th$ falt of th$ $*ploy$$ a%# th$ $*ploy$) ha obtai%$# p$)*iio% i% /)iti% f)o* th$ co%t)olli% atho)ity fo) th$ #$lay$# pay*$%t o% thi )o%# If th$)$ i a%y #ipt$ a to th$ a*o%t payabl$ o) th$  p$)o% $liibl$ to )$c$i.$ it th$ $*ploy$) hall #$poit a*o%t a p$) hi calclatio% /ith th$ co%t)olli% atho)ity&

P)oc$#)$ fo) )$ol.i% th$ #ipt$ *here there is a dispute the aggrieved party shall ma$e an application to the controlling authority for authority  for deciding the dispute controlling authority shall, after due in-uiry and after giving the parties to the dispute a reasonable opportunity of being heard, determine the matter and pass appropriate orders

Po/$) of co%t)olli% atho)ity Th$ co%t)olli% atho)ity hall ha.$ th$  po/$) i% )$p$ct of th$ follo/i% *att$), %a*$ly !a+ $%fo)ci% th$ att$%#a%c$ of a%y p$)o% !b+ )$8i)i% th$ #ico.$)y a%# p)o#ctio% of #oc*$%t0  !c+ )$c$i.i% $.i#$%c$ $.i#$ %c$ o% affi#a.it0  !#+ ii% co**iio% fo) th$ $a*i%atio% of /it%$$&

App$al aai%t th$ o)#$) of co%t)olli% atho)ity App$al if a%y hall b$ *a#$ /ithi% >( #ay f)o* th$ #at$ of th$ o)#$)  App$al by $*ploy$) /ill %ot b$ a#*itt$# %l$ th$ %l$  th$ #ipt$# a*o%t i #$poit$# app$llat$ atho)ity, aft$) i.i% th$ pa)ti$ to th$ app$al a )$ao%abl$ oppo)t%ity of b$i% h$a)#,, h$a)# co%fi)*, *o#ify o) )$.$)$ th$ #$ciio% of #$ciio%  of th$ co%t)olli% atho)ity

Fo)f$it)$ of G)atity #n employee, whose ser$ices ha$e been terminated for any act, willful omission or negligence causing any damage or loss to, or destruction of, property belonging to the employer,, employer shall  be forfeited to the extent of the shall  damage or loss so loss so caused%

Fo)f$it)$ of G)atity the gratuity payable to an employee may be wholly or partially forfeited if the ser$ices of such employee ha$e been terminated for his disorderly his disorderly conduct or conduct or any other act of $iolence on his part, or any act which constitutes an offence , pro$ided that such offence is committed by him in the course of his employment

&omination A% $*ploy$$, /ho ha co*pl$t$# o%$ y$a) of $).ic$, hall *a$ %o*i%atio% A% $*ploy$$ *ay, i% hi %o*i%atio%, #it)ibt$ th$ a*o%t of )atity payabl$, to *o)$ tha% o%$ %o*i%$$ E*ploy$$ ha.i% fa*ily hall *a$ %o*i%atio% i% fa.o) of o%$ o) *o)$ fa*ily *$*b$) *$*b$) o%ly E*ploy$$ %ot ha.i% fa*ily *ay *a$ %o*i%atio% i% fa.o) of oth$) p$)o%= bt ch %o*i%atio%  b$co*$ i%.ali# i%.ali# if  if h$ ac8i)$ a fa*ily at a lat$) #at$& #at$ & Th h$=h$ ha to *a$ f)$h %o*i%atio% aft$) ac8i)i% th$ fa*ily&

&omination E*ploy$$ ha th$ )iht to cha%$ th$ %o*i%atio% i% acco)#a%c$ /ith th$ p)o.iio% of thi Act If a %o*i%$$ p)$#$c$a$ th$ $*ploy$$, th$ i%t$)$t of th$ %o*i%$$ hall )$.$)t to th$ $*ploy$$ /ho hall *a$ a f)$h %o*i%atio% E.$)y %o*i%atio%, f)$h %o*i%atio% o) alt$)atio% of %o*i%atio%, a th$ ca$ *ay b$, hall b$ $%t by th$ $*ploy$$  to hi $*ploy$) /ho hall $$p th$ a*$ i% hi af$ cto#y&

P)ot$ctio% of )atity )atity payabl$ 5hall NOT b$ liabl$ to attach*$%t i% $$ctio% of a%y #$c)$$ o) o)#$) of a%y ci.il, )$.$%$ o) c)i*i%al co)t

Reco$ery of gratuity "f the amount of gratuity payable under this Act is not paid by the employer, within the prescribed time, the controlling authority shall, on an application made to it in this behalf by the aggrieved person, person, issue a certicate for that amount to the Collector,, Collector who shall recover the same, together with compound interest thereon as arrears of land revenue and pay the same to the person entitled

Reco$ery of gratuity controlling authority shall, before issuing a certicate under this section, give the employer a reasonable opportunity of showing cause  cause  against the issue of such certicate. Amount of interest shall not be more than the amount of gratuity payable gratuity  payable

R$it)atio% of Etablih*$%t $.$)y $*ploy$) hall $t hi $tablih*$%t )$it$)$# /ith th$ co%t)olli% atho)ity i% th$  p)$c)ib$# *a%%$) a%# %o $*ploy$) hall b$ )$it$)$# %#$) )$it$)$#  %#$) th$  p)o.iio% of thi $ctio% %l$ h$ ha ta$% a% i%)a%c$ o) ha $tablih$# a% app)o.$# )atity f%#

'ompulsory insurance E.$)y $*ploy$) hall obtai% a% i%)a%c$, fo) hi liability to/a)# pay*$%t of )atity %#$) thi Act, Act, f)o* th$ (' o) other prescribed i%)a%c$ co*pa%y "xemptions by

tat$ a%# c$%t)al o.$)%*$%t 'onditions

*ay exempt any employer who  ha al)$a#y $tablih$# a% app)o.$# )atity f%# a%# /ho #$i)$ to co%ti%$ ch a))a%$*$%t  $*ploy$) $*ployi%