Ppt on THE PAYMENT OF GRATUITY ACT,1972, Slides of Labour Law

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THE PAYMENT

OF GRATUITY

ACT,

INTRODUCTION

• (^) An Act to provide for a scheme for the payment of gratuity to employees

engaged in factories, mines, oilfields, plantations, ports, railway

companies, shops or other establishments and for matters connected.

• (^) a compulsory statutory retiral benefit.
• (^) It is derived from the word ‘gratuitous’, which means ‘gift’ or ‘present’
• (^) compulsory payment of gratuity as a social security
• It extends to the whole of India
• (^) 17 SECTIONS
• HAS DIFFERNENT FORMS FOR VARIOUS PURPOSES

APPLICABLITY OF THE ACT- SECTION

• Employees engaged in factories, mines, oilfields,

plantations, ports, railway companies, shops or

other establishments and for matters connected

therewith or incidental with.

• 10 or more persons are employed, or were

employed

EMPLOYEE – SECTION 2(e)

• (^) any person, who is employed for wages, whether the terms of such

employment with the work of a factory, mine, oilfield, plantation,

port, railway company, shop or other establishment to which this Act

applies

• (^) is governed by any other Act or by any rules providing for payment of

gratuity

• (^) other than an apprentice

WHEN WILL GRATUITY WILL BE

PAID? SECTION 4

• (^) Gratuity shall be payable to an employee on the termination of his

employment after he has rendered continuous service for not less

than five years,-

• (^) (a) on his superannuation- an organizational pension program created

by a company for the benefit of its employees.

(b) on his retirement or resignation, or

• (^) (c) on his death or disablement (five-year service not required) due

to accident or disease

HOW TO CALCULATE THE GRATUITY

AMOUNT

• 3 TYPES OF WORKERS

Monthly rated workers

Piece rated/ daily wages workers

Seasonal establishments

Piece rated/ daily wages

workers

• 15 * Average wage received by him

for 3 month immediately preceding

the termination of the employee*

the working tenure / 26.

Seasonal

establishments

• 15 * At the rate of 7 days wages*

the working tenure / 26.

SECTION 5- Power to exempt

• (^) The appropriate government
• (^) By notification
• (^) Can change the applicability of the act
• (^) exempt any establishment, factory, mine, oilfield, plantation, port,

railway company or shop to which this Act applies from the operation

of the provisions of this Act.

• (^) Notification can be issued retrospectively a date not earlier than the

date of commencement of this Act

NOMINATIONS- SECTION 6

• (^) (1) Each employee, who has completed one year of service, shall make nomination for the purpose of the

giving the future gratuity amount if the employee dies

• (^) (2) An employee may, in his nomination, distribute the amount of amongst more than one nominee.
• (^) (3) If an employee has a family at the time of making a nomination, the nomination shall be made in

favour of one or more members of his family,

• (^) any nomination made by such employee in favour of a person who is not a member of his family, shall be

void.

• (4) the employee has no family, the nomination may be made in favour of any person or persons but if the

employee subsequently acquires a family, such nomination shall forthwith become invalid and the

employee shall make, within such time as may be prescribed, a fresh nomination in favour of one or more

members of his family.

• (^) (5) A nomination may be modified by an employee at any time, after giving to his employer a written

notice in such form and in such manner as may be prescribed, of his intention to do so.

• (^) (6) If a nominee predeceases the employee, the interest of the nominee shall revert to the employee who

shall make a fresh nomination in the prescribed form, in respect of such interest.

• (^) (7) Every nomination, fresh nomination or alteration of nomination, as the case may be, shall be sent by

the employee to his employer, who shall keep the same in his safe custody.

PENALITIES- SECTION 9

• (^) FALSE STATEMENT OT FALSE REPRESENTATION for the purpose of

avoiding any payment- Imprisonment upto 1 year or Rs. 10,000 fine or

both

• (^) An employer who contravenes, or makes default in complying with,

any of the provisions of this Act or any rule- Imprisonment between 3

months – 1 year or Rs. 10,000- 20,000 fine or both

• (^) offence relates to non-payment of any gratuity payable under this Act-

Imprisonment between 6 months – 2 year or fine