LCI Learning

Share on Facebook

Share on Twitter

Share on LinkedIn

Share on Email

Share More

Prakash Yedhula (Lawyer)     08 January 2008

Payment of Gratuity Act, 1972




PREAMBLE

The Act provides for the payment of gratuity to workers employed in every factory, shop & establishments or educational institution employing 10 or more persons on any day of the proceeding 12 months. A shop or establishment to which the Act has become applicable shall continue to be governed by the Act even if the number of persons employed falls bellow 10 at any subsequent stage.

All the employees irrespective of status or salary are entitled to the payment of gratuity on completion of 5 years of service. In case of death or disablement there is no minimum eligibility period. The amount of gratuity payable shall be at the rate of 15 days wages based on the rate of wages last drawn, for every completed year of service. The maximum amount of gratuity payable is Rs. 3,50,000/-.

Formula is - Last Wages *15*No. of services/26

NOMINATION

Each employee is required to nominate one or more member of his family, as defined in the Act, who will receive the gratuity in the event of the death of the employee.

ADMINISTRATIVE MACHINERY

All the Assistant Labour Commissioners and Labour Officers in the Labour Department have been appointed Controlling Authority and all the Deputy Labour Commissioners have been appointed Appellate Authority under the Act.

RESPONSIBILITY OF THE EMPLOYERS

It is the duty of the employer to determine the amount of gratuity as soon as it becomes payable and to give notice of the same to the person to whom gratuity is payable and also to the Controlling Authority. The employer shall also provide to pay the amount of gratuity to the person to whom it is payable. Failure to do so shall render him liable to pay the interest at the prevailing rate from time taken.

In case the employee is not paid the due amount of gratuity he should apply, ordinarily within thirty days, in Form-I to the employer. Is an employer fails to pay due gratuity even after the receipt of notice in Form-1, the claimant employee or his nominee or legal heir, may within ninety days of the occurrence of the case for the application, should apply in Form-IV, to the Controlling Authority for issuing direction to the employer. After conducting the enquiry as prescribed, the Controlling Authority will determine the amount payable and direct the employer to make the payment. If the employer fails to comply with the direction the Controlling Authority can direct the Collector to recover the amount due and pay to the applicant.







Learning

 7 Replies

Shambasiv (n/a)     12 January 2008

Thankyou very much sir for your valuable information
[img]chrome://piclens/content/launch.png[/img]

sant786 (n/a)     17 January 2008

Dear Sir,

for the maternity benefits qualification no of working days are given different every where that si 180 days, 160 days 80 days please confirm me the eligibility criteria for this

 

and also is there any amendment regarding the 12 weeks leaves

 

please waiting for your repy.

SANJAY DIXIT (Advocate)     20 January 2008

Thanks Mr Prakash for the information.

zafar khan (Service)     20 March 2008

Thanks for share the such a useful information --- Zafar, jaipur

Shailendra Desai (Retired)     08 December 2008

Can a person removed for disciplinery action after  26 years of services ?

Shailendra Desai (Retired)     08 December 2008

Can a person, removed for disciplinery action after  26 years of services, get  gratuity ?

Shree. ( Advocate.)     15 December 2008

Dear Sir,


The Payment of Gratuity Act does not prescribe any limitation to claim gratuity.

An employee can file an application for gratuity any time.

It is an obligation on the part of the employer to pay the gratuity after retirement or after termination of employee's service. The employee should complete at least five years service to be entitled to receive gratuity.

Payment of gratuity is not a bounty to the employee by the employer. It is the right of an employee to claim gratuity. The employer can not delay in disbursement of gratuity. The amount should be disbursed without delay.

Leave a reply

Your are not logged in . Please login to post replies

Click here to Login / Register