The Payment of Gratuity Act (The Payment of Gratuity (Amendment) Act, ) provides for the payment of gratuity to employees engaged in industries. BILL further to amend the Payment of Gratuity Act, BE it enacted by Parliament in the Sixty-eighth Year of the Republic of India as follows. Read about gratuity in India, rules under the gratuity act, including relevant recipients, how to calculate cost, and other payment and tax.
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This Act may be cited as the Payment of Gratuity Act, No of , and (a) shall be entitled to the payment of a gratuity under section 2, in a sum equiva-. An Act to provide for a scheme for the payment of gratuity to employees . 2 Substituted by the Payment of Gratuity (Amendment) Act, ( An Act to provide for a scheme for the payment of gratuity to employees by any other Act or by any rules providing for payment of gratuity;.
As per Section 4 1 , the completion of continuous service of 5 years is not required where termination of employment is due to death or disablement. Application made to the labour commissioner by an employee. Inspector has the power to search and seize with the warrant under criminal code procedure. One of the respondents, who was the Chief Executive Officer of the petitioner corporation, had resigned after rendering service of 12 years. If there is any dispute in payment of the gratuity, employer should deposit the gratuity payable amount with controlling authority until the dispute is settled by him.
Gratuity is paid at a rate of 15 days wages for every completed year of service or part thereof in excess of Six months. The wages here means wages last drawn by the employee. The "15 Days Wages" will be calculated by dividing the last drawn wages by 26 and multiplying the result with But under section 4 3 , the maximum gratuity that is payable is fixed at Rupees 30,00, .
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January MidCap Mania. Retrieved Retrieved from " https: Hidden categories: Namespaces Article Talk. In case of period of one year Employee will be treated as he in continuous service, if he is employed by employer for the period of. In case of period of 6 months Employee will be treated as he in continuous service, if he is employed by employer for the period of.
Seasonal Establishments in which, although work is carried on throughout the year, the number of employees is regularly subject to seasonal fluctuations for reasons associated with the weather, their sales or their location.
For example, hotels and restaurants in health spas and holiday resorts, gravel and sand pits and stone quarries are deemed to be seasonal establishments.
Provided that the completion of continuous service of 5 years shall not be necessary where the termination of the employment of any employee is due to death or disablement: Provided further that in the case of death of the 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 who shall invest the same for the benefit of such minor in such bank or other financial institution, as may be prescribed, until such minor attains majority.
Calculation of gratuity [Sec 4 2 ].
Delhi HC. Read Judgement. The Delhi High Court has held that a claim for gratuity in excess of the ceiling limit prescribed under Section 4 3 is not at all beyond the scope of the Payment of Gratuity Act, Further, just because there is a ceiling placed under the provision, it cannot be said that the jurisdiction of the Controlling Authority under the Act to examine a dispute under Section 7 4 b is curtailed to the same pecuniary limit.
The judgment was passed by a Single Judge Bench of Justice Rekha Palli in a batch of petitions assailing identical but separate orders passed by the statutory authorities under the said Act.
The said orders had upheld the claim of the respondent employees to receive gratuity beyond the ceiling limit prescribed under Section 4 3 of the Act. One of the respondents, who was the Chief Executive Officer of the petitioner corporation, had resigned after rendering service of 12 years.
As payment towards gratuity, the petitioner corporation sent out of Rs. The respondent, on the other hand, claimed that he was entitled to a total of Rs.
He wrote to the petitioner corporation claiming this sum as gratuity, but to no avail. Aggrieved by the amount of gratuity paid to him, he filed a claim application before the Controlling Authority under Section 7 of Act. Consequently, the Controlling Authority allowed his claim for gratuity and directed the petitioner corporation to pay him Rs.
The said order was upheld by the Appellate Authority. The petitioner corporation then filed a writ petition before the Delhi High Court challenging the findings of the Controlling Authority and Appellate Authority. Before the High Court, the petitioner corporation argued that Section 4 3 of the said Act categorically provided that the maximum gratuity payable to an employee under the Act was Rs.
It was further argued that since the Act imposed a maximum limit of Rs. Rejecting the contentions put forth by the petitioner corporation, the Court observed that while Section 4 3 generally prescribes a limit on the maximum amount of gratuity, Section 4 5 carves out an exception for those employees who have better terms of gratuity under an award, or an agreement or contract with the employer. Holding that in the absence of a specific clause that caps the maximum amount of gratuity payable to an employee, the employment conditions cannot be construed to mean that the ceiling limit under Section 4 3 is applicable, the Court observed.
Sec 4 4 For the purpose of computing the gratuity payable to an employee who is employed, after his disablement, on reduced wages, his wages for the period preceding his disablement shall be taken to be the wages received by him during that period, and his wages for the period subsequent to his disablement shall be taken to be the wages as so reduced.
Sec 4 5 Nothing in this section shall affect the right of an employee to receive better terms of gratuity under any award or agreement or contract with the employer. Payment of gratuity is not applicable to employee who has been dismissed from the service for the reason of indiscipline or misconduct.
Phoenix Mills 1 labour law Journal 2 58 , the court held that there was a service of petitioner has been terminated by dismissal, it cannot be said that he was in continuous service from the date of employment will the date of superannuation. Civil No. The Supreme Court has held that dismissal from service does not automatically result in forfeiture of gratuity under the Payment of Gratuity Act, Act.
The same is subject to Sections 4 5 and 4 6 of the Act. PENALTIES [Sec 4A 6 ] Whoever employer fails in payment of insurance or contribution towards the approved gratuity fund shall be punishable with fine which may extend to ten thousand rupees and in the case of a continuing offence with a further fine which may extend to one thousand rupees for each day during which the offence continues.
On the employee choice gratuity payable to him can be distributed amongst the nominees. If employee has family members before making nomination, Nominees should be from his family members only.
If employee has no family members before making nomination, Nominees can be any other person who he likes. Nominees as the other persons become in valid if the employee acquires family members in the future time.
Employee can make changes in nominees. Change of name of nominees should be intimated to employer by employee. When gratuity becomes payable and if no application received from employee, employer should give notice of payment of gratuity to the employer and also to the controlling authority specifying the amount of gratuity so determined.
The employer should arrange to pay the amount of gratuity within 30 days from the date it becomes payable to the person to whom the gratuity is payable. If the amount of gratuity payable is not paid by the employer within the 30 days , the employer shall pay, from the date on which the gratuity becomes payable to the date on which it is paid, simple interest at such rate, not exceeding the rate notified by the Central Government. Provided that no such interest shall be payable if the delay in the payment is due to the fault of the employee and the employer has obtained permission in writing from the controlling authority for the delayed payment on this ground.
If there is any dispute in payment of the gratuity, employer should deposit the gratuity payable amount with controlling authority until the dispute is settled by him. Once the dispute is settled by the controlling authority, the deposited amount with him will be paid to employee.
Any person in dispute is not satisfied with decision order made by the controlling authority, within 60 day from the date of order by controlling authority, appeal to the appropriate Government or the appellate authority. For admitting the appeal by the employer to the appellate authority, employer should deposit the amount equal to the amount of gratuity with the appellate authority. The appropriate Government may, by general or special order, define the area to which the authority of an Inspector so appointed will extend.
Where two or more Inspectors are appointed for the same area, appropriate Government also provide, by such order, for the distribution or allocation of work to be performed by them under this Act. Every Inspector shall be deemed to be a public servant within the meaning of section 21 of the Indian Penal Code, Inspectors can enter and inspect at all reasonable hours with his assistants who are government servants, any premises or place in any factory, mine, oilfield, plantation, port, railway company, shop or other establishment for the purpose of examining any register, record or notice or other document required to be kept or exhibited in relation to the payment of gratuity to the employees.
Inspector can examine the employer or employee concern to the gratuity matters. In case any offence is committed by employer under this act, inspector can seize all register, record, notice or other document as he may consider relevant in respect of that offence.
Inspector has the power to search and seize with the warrant under criminal code procedure. On receipt of such application by the controlling authority issue a certificate fro the amount to the collector fro the recovery of the amount with compound interest.