Hi Mausam,
Can you please help me out? What is the gratuity law? For instance, if a company does not pay gratuity to an employee who has worked for more than 15 years in the company, what actions can be taken against the organization, and what does the law say about it?
Thanks in advance.
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6Can you please help me out? What is the gratuity law? For instance, if a company does not pay gratuity to an employee who has worked for more than 15 years in the company, what actions can be taken against the organization, and what does the law say about it?
Thanks in advance.
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Pl. clarify the Calculation of gratutiy of the employee, in case of death or disablement before completion of 5 year. Deepak Sharma
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Dear Hemant,
It's really an informative document. Thanks a ton for the same. Could you please send me summaries of various laws? It would be very helpful to me.
I have one more burning issue. If you could help me, what legal actions can be taken if a person absconds from duty directly from the site? We are facing a lot of trouble, and now people have made it a trend in our organization. Please help me out with this.
Regards,
Mausam
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It's really an informative document. Thanks a ton for the same. Could you please send me summaries of various laws? It would be very helpful to me.
I have one more burning issue. If you could help me, what legal actions can be taken if a person absconds from duty directly from the site? We are facing a lot of trouble, and now people have made it a trend in our organization. Please help me out with this.
Regards,
Mausam
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if the company is not paing gratuity action can be taken against the company. for more detail reffer gratuity act. malik
From India, New+Delhi
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From India, New+Delhi
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Dear Mausam,
Please find below the entire act, referencing Section 9 for penalties.
Regards,
Suresh Ramalingam
THE PAYMENT OF GRATUITY ACT, 1972. ACT NO. 39 OF 1972. [21st August, 1972.]
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 therewith or incidental thereto.
BE it enacted by Parliament in the Twenty-third Year of the Republic of India as follows:--
1. Short title, extent, application, and commencement.
1. Short title, extent, application, and commencement.- (1) This Act may be called the Payment of Gratuity Act, 1972. (2) It extends to the whole of India:
Provided that insofar as it relates to plantations or ports, it shall not extend to the State of Jammu and Kashmir.
(3) It shall apply to--
(a) every factory, mine, oilfield, plantation, port, and railway company;
(b) every 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;
(c) such other establishments or class of establishments, in which ten or more employees are employed, or were employed, on any day of the preceding twelve months, as the Central Government may, by notification, specify in this behalf.
1*[ (3A) A shop or establishment to which this Act has become applicable shall continue to be governed by this Act notwithstanding that the number of persons employed therein at any time after it has become so applicable falls below ten.]
(4) It shall come into force on such date2* as the Central Government may, by notification, appoint.
2. Definitions.- In this Act, unless the context otherwise requires,--
(a) "appropriate Government" means,--
(i) in relation to an establishment--
(a) belonging to, or under the control of, the Central Government,
(b) having branches in more than one State,
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1. Ins. by Act 26 of 1984, s. 2. 2. 16th September 1972; vide Notification No. S. O. 601(E), dated 16-9-1972, see Gazette of India, 1972, Extraordinary, Pt. II, Sec. 3(ii), p. 1641.524. (c) of a factory belonging to, or under the control of, the Central Government,
(d) of a major port, mine, oilfield, or railway company, the Central Government,
(ii) in any other case, the State Government;
(b) "completed year of service" means continuous service for one year;
1*[(c) "continuous service" means continuous service as defined in section 2A;]
(d) "controlling authority" means an authority appointed by the appropriate Government under section 3;
(e) "employee" means any person (other than an apprentice)
employed on wages 2*** in any establishment, factory, mine, oilfield, plantation, port, railway company, or shop, to do any skilled, semi-skilled, or unskilled, manual, supervisory, technical, or clerical work, whether the terms of such employment are express or implied, 3*[and whether or not such person is employed in a managerial or administrative capacity, but does not include any such person who holds a post under the Central Government or a State Government and is governed by any other Act or by any rules providing for the payment of gratuity.]
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1. Subs. by Act 26 of 1984, s. 3.
2. Omotted by Act 34 of 1994, s. 4 (w.e.f. 25-5-1994).
3. Subs. by Act 25 of 1984, s. 2 (w.e.f. 1-7-1984).
525. (f) "employer" means, in relation to any establishment, factory, mine, oilfield, plantation, port, railway company, or shop--
(i) belonging to, or under the control of, the Central Government or a State Government, a person or authority appointed by the appropriate
Government for the supervision and control of employees, or where no person or authority has been so appointed, the head of the Ministry or the
Department concerned,
(ii) belonging to, or under the control of, any local authority, the person appointed by such authority for the supervision and control of employees or where no person has been so appointed, the chief executive officer of the local authority,
(iii) in any other case, the person, who, or the authority which, has the ultimate control over the affairs of the establishment, factory, mine, oilfield, plantation, port, railway company, or shop, and where the said affairs are entrusted to any other person, whether called a manager, managing director, or by any other name, such person;
(g) "factory" has the meaning assigned to it in clause (m) of section 2 of the Factories Act, 1948 (63 of 1948);
(h) "family," in relation to an employee, shall be deemed to consist of--
(i) in the case of a male employee, himself, his wife, his children, whether married or unmarried, his dependent parents 1*[and the dependent parents of his wife and the widow] and children of his predeceased son, if any,
(ii) in the case of a female employee, herself, her husband, her children, whether married or unmarried, her dependent parents and the dependent parents of her husband and the widow and children of her predeceased son, if any.
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1. Subs. by Act 22 of 1987, s. 2 (w.e.f. 1-10-1987).
526. 1* * * * *
Explanation.--Where 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 making such adoption, lawful, such child shall be deemed to be excluded from the family of the employee;
(i) "major port" has the meaning assigned to it in clause (8) of section 3 of the Indian Ports Act, 1908 (15 of 1908);
(j) "mine" has the meaning assigned to it in clause (j) of sub-section (1) of section 2 of the Mines Act, 1952 (35 of 1952);
(k) "notification" means a notification published in the Official Gazette;
(l) "oilfield" has the meaning assigned to it in clause (e) of section 3 of the Oilfields (Regulation and Development) Act, 1948 (53 of 1948);
(m) "plantation" has the meaning assigned to it in clause (f) of section 2 of the Plantations Labour Act, 1951 (69 of 1951);
(n) "port" has the meaning assigned to it in clause (4) of section 3 of the Indian Ports Act, 1908 (15 of 1908);
(o) "prescribed" means prescribed by rules made under this Act;
(p) "railway company" has the meaning assigned to it in clause (5) of section 3 of the Indian Railways Act, 1890 (9 of 1890);
(q) "retirement" means termination of the service of an employee otherwise than on superannuation;
1*[(r) "superannuation", in relation to an employee, means the attainment by the employee of such age as is fixed in the contract or conditions of service as the age on the attainment of which the employee shall vacate the employment;]
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2. Subs. by Act 25 of 1984, s. 2 (w.e.f. 1-7-1984).
1. Omitted by Act 22 of 1987, s. 2 (w.e.f. 1-10-1987).
527. (s) "wages" means all emoluments which are earned by an employee while on duty or on leave in accordance with the terms and conditions of his employment and which are paid or are payable to him in cash and include dearness allowance but do not include any bonus, commission, house rent allowance, overtime wages, and any other allowance.
2A. Continuous service.
2* ["2A. Continuous service.- For the purposes of this Act,--
(1) an employee shall be said to be in continuous service for a period if he has, for that period, been in uninterrupted service, including service which may be interrupted on account of sickness, accident, leave, absence from duty without leave (not being absence in respect of which an order 3*** treating the absence as a break in service has been passed in accordance with the standing orders, rules, or regulations governing the employees of the establishment), lay-off, strike or a lock-out or cessation of work not due to any fault of the employee, whether such uninterrupted or interrupted service was rendered before or after the commencement of this Act;
(2) where an employee (not being an employee employed in a seasonal establishment) is not in continuous service within the meaning of clause (1), for any period of one year or six months, he shall be deemed to be in continuous service under the employer--
(a) for the said period of one year, if the employee during the period of twelve calendar
From India, Mumbai
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Please find below the entire act, referencing Section 9 for penalties.
Regards,
Suresh Ramalingam
THE PAYMENT OF GRATUITY ACT, 1972. ACT NO. 39 OF 1972. [21st August, 1972.]
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 therewith or incidental thereto.
BE it enacted by Parliament in the Twenty-third Year of the Republic of India as follows:--
1. Short title, extent, application, and commencement.
1. Short title, extent, application, and commencement.- (1) This Act may be called the Payment of Gratuity Act, 1972. (2) It extends to the whole of India:
Provided that insofar as it relates to plantations or ports, it shall not extend to the State of Jammu and Kashmir.
(3) It shall apply to--
(a) every factory, mine, oilfield, plantation, port, and railway company;
(b) every 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;
(c) such other establishments or class of establishments, in which ten or more employees are employed, or were employed, on any day of the preceding twelve months, as the Central Government may, by notification, specify in this behalf.
1*[ (3A) A shop or establishment to which this Act has become applicable shall continue to be governed by this Act notwithstanding that the number of persons employed therein at any time after it has become so applicable falls below ten.]
(4) It shall come into force on such date2* as the Central Government may, by notification, appoint.
2. Definitions.- In this Act, unless the context otherwise requires,--
(a) "appropriate Government" means,--
(i) in relation to an establishment--
(a) belonging to, or under the control of, the Central Government,
(b) having branches in more than one State,
---------------------------------------------------------------------
1. Ins. by Act 26 of 1984, s. 2. 2. 16th September 1972; vide Notification No. S. O. 601(E), dated 16-9-1972, see Gazette of India, 1972, Extraordinary, Pt. II, Sec. 3(ii), p. 1641.524. (c) of a factory belonging to, or under the control of, the Central Government,
(d) of a major port, mine, oilfield, or railway company, the Central Government,
(ii) in any other case, the State Government;
(b) "completed year of service" means continuous service for one year;
1*[(c) "continuous service" means continuous service as defined in section 2A;]
(d) "controlling authority" means an authority appointed by the appropriate Government under section 3;
(e) "employee" means any person (other than an apprentice)
employed on wages 2*** in any establishment, factory, mine, oilfield, plantation, port, railway company, or shop, to do any skilled, semi-skilled, or unskilled, manual, supervisory, technical, or clerical work, whether the terms of such employment are express or implied, 3*[and whether or not such person is employed in a managerial or administrative capacity, but does not include any such person who holds a post under the Central Government or a State Government and is governed by any other Act or by any rules providing for the payment of gratuity.]
---------------------------------------------------------------------
1. Subs. by Act 26 of 1984, s. 3.
2. Omotted by Act 34 of 1994, s. 4 (w.e.f. 25-5-1994).
3. Subs. by Act 25 of 1984, s. 2 (w.e.f. 1-7-1984).
525. (f) "employer" means, in relation to any establishment, factory, mine, oilfield, plantation, port, railway company, or shop--
(i) belonging to, or under the control of, the Central Government or a State Government, a person or authority appointed by the appropriate
Government for the supervision and control of employees, or where no person or authority has been so appointed, the head of the Ministry or the
Department concerned,
(ii) belonging to, or under the control of, any local authority, the person appointed by such authority for the supervision and control of employees or where no person has been so appointed, the chief executive officer of the local authority,
(iii) in any other case, the person, who, or the authority which, has the ultimate control over the affairs of the establishment, factory, mine, oilfield, plantation, port, railway company, or shop, and where the said affairs are entrusted to any other person, whether called a manager, managing director, or by any other name, such person;
(g) "factory" has the meaning assigned to it in clause (m) of section 2 of the Factories Act, 1948 (63 of 1948);
(h) "family," in relation to an employee, shall be deemed to consist of--
(i) in the case of a male employee, himself, his wife, his children, whether married or unmarried, his dependent parents 1*[and the dependent parents of his wife and the widow] and children of his predeceased son, if any,
(ii) in the case of a female employee, herself, her husband, her children, whether married or unmarried, her dependent parents and the dependent parents of her husband and the widow and children of her predeceased son, if any.
---------------------------------------------------------------------
1. Subs. by Act 22 of 1987, s. 2 (w.e.f. 1-10-1987).
526. 1* * * * *
Explanation.--Where 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 making such adoption, lawful, such child shall be deemed to be excluded from the family of the employee;
(i) "major port" has the meaning assigned to it in clause (8) of section 3 of the Indian Ports Act, 1908 (15 of 1908);
(j) "mine" has the meaning assigned to it in clause (j) of sub-section (1) of section 2 of the Mines Act, 1952 (35 of 1952);
(k) "notification" means a notification published in the Official Gazette;
(l) "oilfield" has the meaning assigned to it in clause (e) of section 3 of the Oilfields (Regulation and Development) Act, 1948 (53 of 1948);
(m) "plantation" has the meaning assigned to it in clause (f) of section 2 of the Plantations Labour Act, 1951 (69 of 1951);
(n) "port" has the meaning assigned to it in clause (4) of section 3 of the Indian Ports Act, 1908 (15 of 1908);
(o) "prescribed" means prescribed by rules made under this Act;
(p) "railway company" has the meaning assigned to it in clause (5) of section 3 of the Indian Railways Act, 1890 (9 of 1890);
(q) "retirement" means termination of the service of an employee otherwise than on superannuation;
1*[(r) "superannuation", in relation to an employee, means the attainment by the employee of such age as is fixed in the contract or conditions of service as the age on the attainment of which the employee shall vacate the employment;]
---------------------------------------------------------------------
2. Subs. by Act 25 of 1984, s. 2 (w.e.f. 1-7-1984).
1. Omitted by Act 22 of 1987, s. 2 (w.e.f. 1-10-1987).
527. (s) "wages" means all emoluments which are earned by an employee while on duty or on leave in accordance with the terms and conditions of his employment and which are paid or are payable to him in cash and include dearness allowance but do not include any bonus, commission, house rent allowance, overtime wages, and any other allowance.
2A. Continuous service.
2* ["2A. Continuous service.- For the purposes of this Act,--
(1) an employee shall be said to be in continuous service for a period if he has, for that period, been in uninterrupted service, including service which may be interrupted on account of sickness, accident, leave, absence from duty without leave (not being absence in respect of which an order 3*** treating the absence as a break in service has been passed in accordance with the standing orders, rules, or regulations governing the employees of the establishment), lay-off, strike or a lock-out or cessation of work not due to any fault of the employee, whether such uninterrupted or interrupted service was rendered before or after the commencement of this Act;
(2) where an employee (not being an employee employed in a seasonal establishment) is not in continuous service within the meaning of clause (1), for any period of one year or six months, he shall be deemed to be in continuous service under the employer--
(a) for the said period of one year, if the employee during the period of twelve calendar
From India, Mumbai
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Case Law on Gratuity.doc