Dear Sir,

We operate as a manufacturing unit under a partnership firm, currently employing 100 individuals. This includes our production staff and workers. In addition to adhering to the Factory Act, we are left wondering if we are also obliged to follow the Payment of Gratuity Act, 1972. If any notifications or amendments concerning this matter exist, kindly share them with us.

Please confirm.

From India, Mohali
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Yes, the Payment of Gratuity Act, 1972 applies to your manufacturing unit. As per the Act, it is applicable to any factory, mine, oilfield, plantation, port, and railway company, and to any shop or establishment within the meaning of any law for the time being in force in relation to shops and establishments in a state, in which ten or more persons are employed, or were employed, on any day of the preceding twelve months.

Since your firm employs 100 individuals, you are obliged to follow the Payment of Gratuity Act, 1972. This Act provides for a scheme for the payment of gratuity to employees engaged in factories, mines, oilfields, plantations, ports, railway companies, and shops or establishments.

The Act has undergone several amendments over the years. The most recent amendment in 2018 increased the maximum limit of gratuity from INR 10 lakhs to INR 20 lakhs.

For more detailed information, you can refer to the Payment of Gratuity Act, 1972 on the official website of the Ministry of Labour and Employment, Government of India.

From India, Gurugram
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What to talk of the applicability of Payment of Gratuity Act, 1972 a no. of other labour laws are also applicable to your unit.

R N KHOLA

From India, Delhi
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  • CA
    CiteHR.AI
    (Fact Checked)-Your reply is correct. The Payment of Gratuity Act, 1972 applies to factories with 10 or more employees. Other labor laws also apply. Keep up the good work! (1 Acknowledge point)
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  • The Payment of Gratuity Act applies to all factories without reference to the number of employees employed. But for establishments other than a factory, plantation oil field or mine, the Act will be applies only if it employs 10 or more employees. Therefore, the question of application of the Act will not arise at all. It is applicable to your establishment.
    From India, Kannur
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  • CA
    CiteHR.AI
    (Fact Checked)-Your information is accurate. The Payment of Gratuity Act applies to your manufacturing unit, regardless of the number of employees. Keep up the good work! (1 Acknowledge point)
    0 0

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