Payment
of Gratuity Act, 1972
[No. 39 of 19721 as amended up to Acts 25 of 19841a, 26 of 19841b and 22 of 19871]
[21st September, 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-second Year of the Republic of India as follows:
Prefatory Note-
Statement of Objects and Reasons.-(1) There is at present no Central
Act to regulate the payment of gratuity to industrial
workers, except the Working Journalists (Conditions
of Service) and Miscellaneous Provisions Act. 1995.
The Government of Kerala enacted legislation last year
for payment of gratuity to workers employed in factories,
plantations, shops and establishments. The West Bengal
Governor promulgated an Ordinance on the 3rd June, 1971,
prescribing a similar scheme of gratuity. The Ordinance
has since been replaced by the West Bengal Employees'
Payment of Compulsory Gratuity Act. 1971, enacted by
the President on 28th August, 1971. Gratuity is also
being paid by some employers to their workers under
awards and agreements.
(2) Since the enactment of the
Kerala and the West Bengal Acts, some other State Governments
have also voiced their intention of enacting similar
measures in their respective States. It has become necessary,
therefore, to have a Central Law on the subject so as
to ensure a uniform pattern on payment of gratuity to the employees
throughout the country. The enactment of a Central Law
would also avoid different treatment to the employees
of establishments having branches in more than one State
when, under the conditions of their service, the employees
are liable to transfer from one State to another.
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Footnotes
1. Received the assent of the
President on August 21, 1972 and published in the Gazette
of India, Extra., Part II, Section I, dated 22nd August,
1972, pp. 661-670.
1a. Received the assent of the
President on May 18, 1984 and published in the Gazette
of India, Extra, Pt. II, Section 1, dt, 18-5-1984, SI.
33. It came into force on 1-7-1984, vide Noti. No. S.
70012/2/84-FPG, dt. 14-6-1984.
1b. Received the assent of the
President on May 18, 1984 and published in the Gazette
of India, Extra, Pt. II, Section 1, 18-5-1984, SI.34.
1c. Received the assent of the
President on August 12, 1987 and published in the Gazette
of India, Extra., Pt. II, section 1,dated August13,
1987. |
(3) The proposal for Central
legislation on gratuity was discussed in the Labour
Ministers' Conference held at New Delhi on the 24th
and 25th August, 1971 and also in the Indian Labour
Conference at its Session held on the 22nd and 23rd
October, 1971. There was general agreement at the Labour
Ministers' Conference and the Indian Labour Conference
that Central legislation on payment of gratuity might
be undertaken as early as possible. It is accordingly
proposed to undertake such legislation.
(4) In enacting the President
Act for West Bengal in August, 1971, care has been taken
to so design its provisions that they could serve as
far as possible as norms for the Central Law. The Bill
has, therefore been drafted on the lines of the West
Bengal Employees' Payment of Compulsory Gratuity Act,
1971 with some modifications which have been made in
the light of the views expressed at the Indian Labour
Conference relating to forfeiture of gratuity in cases
of dismissal for gross misconduct.
(5) The Bill provides for payment
of gratuity to employees drawing wages up to Rs. 750
per month in factories, plantations, shops, establishments
and mines, in the event of superannuation, retirement,
resignation and death or total disablement due to accident
of disease. The quantum of gratuity payable will be
15 days wages based on the rate of wages last drawn
by the employees concerned for every completed year
of service or part thereof in excess of six months subject
to a maximum of 15 months' wages The term "wages"
will mean basic wage plus dearness allowance.
(6) It is proposed that the appropriate
government for administering the Act in relation to
establishment belonging to or under the control of the
Central Government or a railway company, or a mine,
a major port and oilfield or in relation to establishments
having departments or branches in more than one State,
will be the Central Government, and in relation to other
establishments the State Government.
Statement of Objects and Reasons
to Act 25 of 1984.-(1) The Payment of Gratuity Act,
1972 provides for payment of gratuity to the employees
employed in factories, mines, oilfields, plantations,
ports, railway companies, shops or other establishments
and for matters connected therewith or incidental thereto.
(2) The Supreme Court had in
its judgment in the case of Lalappa Lingappa v. Lakshmi
Vishnu Textile Mills, Sholapur, [1981-1 LLJ 308 : (1981)
2 SCC 238:1981 SCC: (L & S) 316] held that in terms
of the existing definition of "continuous service"
in Section 2(c) of the Act, the permanent employees
were not entitled to payment of gratuity for the years
they remained absent without leave and had actually
worked for less than 240 days in a year. It had been
represented that the enforcement of this ruling has
resulted in denial of gratuity to a number of employees,
whose short term absence had remained unregularised
due to lack of appreciation of its significance for
the purpose of working out their entitlement to gratuity.
It is, therefore not proposed to amend the definition
or "continuous services" suitably and to specifically
provide that a period of absence in respect of which no
punishment or penalty had been imposed would not operate
to interrupt the continuity of service" to provide,-
(a) that an employee working
in an establishment which works for less than six days
in a week and who is not in uninterrupted service for
one year, shall be deemed to be in continuous service
for a period of one year if he has actually worked for
190 days in the preceding year, and
(b) that for determining the
continuous period of six months for the purpose of payment
of gratuity, and employee should have completed half
the number of days of actually work which constitute
"continuous service: for a whole year.
(3) Opportunity is also being
taken to provide that a shop or establishment once covered shall
continue to be covered under the Act not withstanding
that the number of persons employed therein at any time
falls bellow 10. This is intended to check the tendency
among the employers to artificially reduce the number
of employees so as to get out of the coverage under
the Act. It is also proposed to provide for grant of
exemption from the operation of the Act to any person
or class of persons if they are in receipt of gratuity
or pensionary benefits not less favourable than the
benefits conferred under the Act.
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Statement of
Objects and Reasons to Act 22 of 1987.- The Payment of Gratuity Act,
1972, provides for payment of gratuity to persons employed
in factories, mines, oil-fields, plantations, ports,
railway companies, shops and certain other establishments
employing ten or more persons and for matters connected
there with or incidental thereto. The Labour Ministers'
Conference held in 1980 and 1982 had recommended
inter alia
that limit
for payment might be prescribed in the Act itself and
that there should be a suitable provision for recovery
of interest in cases where the payment of gratuity is
delayed. The Indian Labour Conference held in November,
1985 had recommended that a provision for compulsory insurance of employers'
liability and setting up of gratuity Fund for payment
of gratuity be incorporated in the Act. The Trade Unions
have been representing for suitable enhancement in the
wage limit for coverage and ceiling for payment of gratuity.
(2) Based on the above recommendations
and representations, it is proposed to carry out certain
amendments in the Act. Some of the more important amendments
are:-
(i) The coverage of the Act is
being extended to persons drawing wages up to Rs. 2,500
per month and an enabling provision is being made for
raising the wage limit for coverage from time to time;
(ii) Provision is being made
for depositing the amount of gratuity payable to a minor
with the controlling authority who shall invest the
money in a bank or a financial institution for the benefit
of minor;
(iii) The existing ceiling of
20 months' wages for payment of gratuity is being replaced
by a monetary ceiling of Rs. 50,000;
(iv) Provision is being made
for compulsory insurance of employer's liability to
pay gratuity under the Act or in the alternative for
the setting up of a gratuity fund under the provisions
of the Act in relation to establishments employing five
hundred or more employees;
(v) Provision is also being made
for payment of simple interest at a specified rate,
if the amount of gratuity is not paid within thirty
days from the date it becomes payable;
(vi) Penalties prescribed under
the Act are being made more stringent.
The other amendments proposed
in the Bill are of a minor and consequential nature.
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:
Provide that in so far 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 establishment 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 establishment
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.
2[(3-A) 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 date as the Central Government may, be notification,
appoint.
Date of enforcement.-The Act
came into force on 16th September, 1972, vide Noti. No. S.O. 60(E) dated 16th September,
1972, published in Gazette of India, Extra, Part II,
S. 3(ii), dated 16th September, 1972, P, 1641.
Application of the Act-S. 1(3)(c)-
The Act has been applied to following establishments
in which ten or more persons are employed or were employed
on any day of the preceding twelve months w.e.f. the
dates and the notifications noted against each:-
(1) Motor Transport
w.e.f. 8-4-1974
Noti. No. G.S.R. 415, dt. 8-4-1974
(2) Local Bodies w.e.f. 23-1-1982
Noti. No. S.O. 239, dt. 8-1-1982
(3) "Solicitors offices"
w.e.f. 9-1-1982 Noti No. S.O. 111, dt. 28-12-1982.
Note.- The word "establishment"
in Section 1(3)(b) does not refer to "commercial
establishments" alone. State of Punjab v. Labour Court, (1980) 1 SCC 4 : 1980 SCC
(L & S) 123.
So an educational institution
covered by E.P.F. Act, 1952 and T.N. Payment of Subsistence
Allowance Act, is covered. S.I.E.T. Women's College
v. Md. Ibrahim,
(1992) 1 LLJ 91 (Mad) (DB).
U.P. Co-operative Union is an
`establishment'. U.P. Co-operative Union Prabhu Dayal
Srivastava, (1988) 2 LLN 625 : 57 FLR 70 (ALL) (DB).
A Municipal Board is an establishment.
Municipal Board v. Controlling Authority.
(1987) 1 LLN
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Footnote
2. Ins. by Act 26 of 1984, S.2. |
663 (Raj): 1937 Lab IC 575. See
also Municipal Bard, Khurja v. Appellate Authority, (1936) 2 LLN (All) 887;
Municipal Corporation of Delhi v. Smt. V.T. Naresh, (1986) 1 LLN 791 : (1986) 1 LLJ 323; Chanan
Lal v.
Municipal Committees, 1986 Lab IC 638; Nagar Palika
v. Appellate
Authority, (1990) 2 LLJ 156 : (1988) 1 LLN 962 (All);
Commissioner, Coimbatore M.E.U v. A.V. Poulose, (1990) 1 LLN 156 (Mad).
In view of Section 2(viii) of
Punjab Shops and Commercial Establishments Act, 1958,
Haryana State Electricity Board is an establishment.
Haryana State Electricity Board v. Controlling Authority,
1984 Lab IC
668 (P & H).
Office of Regional Commissioner
is an establishment. Regional P.F. Commissioner v. Regional Labour Commr. (Central).,
(1985) 1 LLN
675(Kant): (1985) 2 LLJ 63.
A solicitors' firm is not a commercial
establishment. Dorab Pirojsha Singaporia v. Appellate Authority of I.T., (1986) 2 LLN 114 : (1986) 2 LLJ 501.
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,
(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.
3[(c) "continuous service"
means continuous service as defined in Section 2-A;]
(d) "controlling authority"
means a authority appointed by the appropriate Government
under Section 3;
(e) "employee" means
any person (other than an apprentice) employed on wages,
not exceeding 4[two thousands and five hundred rupees
per mensem, or such higher account as the Central Government
may, having regards to the general level of wages, by
notification specify], in any establishment, factory,
mine, oilfield, plantation, railway company or shop,
to do way skilled, semi-smiled, or unskilled, manual,
supervisory, technical or clerical work, whether the
terms of such employment are express or implied, 4[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 State Government and is governed by any other
Act or by any rules providing for payment of gratuity.]
Explanation.- In the case of
an employee, who, having been employed for
a period of
not less than file year on wages and exceeding 5[the amount for the time being specified by
or under clause (e) per mensem is employed at any time
the after on wages exceeding 6[that
amount], gratuity, in respect of the period during which
such employee was employed on wages not exceeding 6[that amount], shall be determined on the
basis of the wages received by him during that period;
(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 6[and the dependent parents of
his wife and the widow] and children of his predeceased
son, if any,
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Footnotes
3. Subs,
by Act 26
of 1984,S. 3 (w.e.f. 11-2-1981). See also
S. 6 of Act
26 of 1984 later.
4. Subs. by Act 25 of 1984 (w.e.f. 1-7-1984).
5. Subs for "one thousand and six hundred rupees
per mensem" by Act 22 of 1987, S. 2 (w.e.f. 1-10-1987).
6. Subs by Act 22 of 1987, S.
2 (w.e.f. 1-10-1987). |
(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:
7[*
*
*
*].
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);
(i) "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;
(f) "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);
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Footnote
7. Omitted
by Act 22
of 1987, S. 2. (w.e.f. 1-10-1987). |
(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 to the Indian Railways Act, 1890 (9 of 1890);
(q) "retirement" means
termination of the service of an employee otherwise
than on superannuation;
8[(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;]
(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 includes dearness allowance but does
not include any bonus, commission, house rent allowance,
overtime wages and any other allowance.
NOTES
The Central Government is the
appropriate government only in relation to an establishment
having branches in more than one State. There is no
like provision in relation to such an establishment
having factories in different States. Jeewanlal Ltd.
v. Appellate Authority, (1984) 4 SCC 356: 1984 SCC (L
& S) 753.
Public Holidays and Sundays have
to be included in computing the period of employment
D.B.R Mills v. Appellate Authority, (1985) 1 LLN 6222:
1985 Lab IC 612 : (1985) 1 LLJ 181 (AP) (DB).
Whether a person was an employee,
could be determined on the basis of his duties and not
on the basis of his qualifications or hierarchy of the
office. Khanderao P. Rajapadhya v. United Western Board, (1985) 1 LLN 55 : 1984 Lab IC 1910 (Bom).
An employee appointed on a monthly
salary below Rs. 1,600, may sometimes have occasion
to get a salary exceeding that amount. Such an employee
would be entitled to gratuity under the Act only for
the period he drew less than Rs. 1,600 per month and
that too on the basis of the wages received during that
period. Food Corpn. of India. v. Dyanuba K. Nikam, (1985) 2 LLN 146 : 1986
Lab IC 333: (1985) 1 LJR 489 (Guj) (DB).
"Retirement" includes
retrenchment. State of Punjab v. Labour Court, (1980) 1 SCC 4: 1980 SCC (L & S) 123.
9[2-A. 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 [* * *]10 treating the absence as 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;
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Footnotes
8. Subs . by Act 25 of 1984,
S. 2 (w.e.f. 1-7-1984).
9. Ins. by Act 26 of 1984, S. 4 (w.e.f.
11-2-1981).
See
also S. 6
of Act 26 of 1984 later.
10. Omitted
by Act 22
of 1987, S. 3 (w.e.f. 1-10-1987). |
(2) where an employee (not being
an employee employed in a seasonal establishment) is
not in continuous services within the meaning of clause
(1), for any period of one year or six months, he shall
be deemed to be an continuous services under the employer-
(a) for the said period of one
year, if the employee during the period of twelve calendar
months preceding the date with reference to which calculation
is to be made, has actually worked under the employer
for not less than-
(i) One hundred and ninety days,
in the case of employee employed below the ground in mine
or in an establishment which works for less than six
days in week; and
(ii) two hundred and forty days,
in any other case;
(b) for the said period of six
months, if the employee during the period of six calendar
months preceding the date with reference to which the
calculation is to be made, has actually worked under
the employer for not less than-
(i) ninety-five days, in the
case of an employee employed below the ground in a mine
or in an establishment which works for less than six days in a week; and
(ii) one hundred and twenty days,
in any other case;
11[Explanation.-For the purpose
of Clause (2), the number of days on which an employee
has actually worked under an employer shall include
the days on which -
(i) he has been laid-off under
an agreement or as permitted by standing orders
made under
the Industrial Employment (Standing Orders) Act, 1946
(20 of 1946), or under the Industrial Disputes Act,
1947 (14 of 1947), or under any other law applicable
to the establishment;
(ii) he has been on leave with
full wages, earned in the previous year;
(iii) he has been absent due
to temporary disablement cause by accident arising out
of and in the course of his employment; and
(iv) in the case of a female,
she has been on maternity leave; so, however, that the
total period of such maternity leave does not exceed
twelve weeks.]
(3) where an employee, employed
in a seasonal establishment, is not in continuous service
within the meaning of clause (I), for any period of
one year or six months, he shall be deemed to be in
continuous service under the employer for such period
if he has actually worked for not less than seventy-five
per cent of the number of days on which the establishment
was in operation during such period.].
3. Controlling authority.-The appropriate Government,
may, by notification, appoint any officer to be a controlling
authority, who shall be responsible for the administration
of this Act and different controlling authorities may
be appointed
for different areas.
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Footnote
11. Added by Act 22 of 1987 ( w.e.f. 1-10-1987). |
4. Payment of gratuity.-(1) 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, or
(b) on his retirement or resignation,
or
(c) on his death or disablement
due to accident or disease:
Provided that the completion
of continuous service of five years shall not be necessary
where the termination of the employment of any employees
is due to death or disablement:
12[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.]
Explanation.- For the purposes
of this section, disablement means such disablement
as incapacitates an employee for the work which he was
capable of performing before the accident or disease
resulting in such disablement.
(2) For every completed year
of service or part thereof in excess of six months,
the employer shall pay gratuity to an employee at the
rate of fifteen days' wages based on the rate of wages
last drawn by the employee concerned:
Provided that in the case of
a piece-rated employee, daily wages shall be computed
on the average of the total wages received by him for
a period of three months immediately preceding the
termination of his employment, and, for this purpose,
the wages paid for any overtime work shall not be taken
into account:
Provided further that in the
case of 13[an employee who is employed
in a seasonal establishment and who is not so employed
throughout the year], the employer shall pay the gratuity
at the rate of seven days' wages for each season.
14a[Explanation.-In the case of
a monthly rated employee, the fifteen days' wages shall
be calculated by dividing the monthly rate of wages
last drawn by him by twenty-six and multiplying the
quotient by fifteen.]
(3) The amount of gratuity payable
to an employee shall not exceed 14a [fifty thousand rupees].
(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.
(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.
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Footnotes
12. Subs. by Act 22 of 1987,
S. 4 (w.e.f. 1.2.1991) (!991 CCL-III-210).
13. Subs. by Act 25 of 1984,
S. 3 (w.e.f. 1-7-1984).
14. Ins. by Act 22 of 1987, S.
4 (w.e.f. 1-10-1987).
14a. Subs. by Act 22 of 1987,
S. 4(3) (w.e.f. 1-10-1987. |
(6) Notwithstanding anything
contained in sub-section (1),-
(a) the gratuity of an employee,
whose services have been terminated of any act, willful
omission or negligence causing any damage or loss to,
or destruction of, property belonging to the employer,
shall be forfeited to the extend of the damage or loss
so cause;
(b) the gratuity payable to an
employee 9[may be wholly or partially forfeited].
(i) if the services of such employee
have been terminated for his riotous or disorderly conduct
or any other act of violence on his part, or
(ii) if the services of such
employee have been terminated for any act which constitutes
an offence involving moral turpitude, provided that
such offence is committed by him in the course of his
employment.
15(7) For the removal of doubts,
it is hereby declared that the gratuity determined in
accordance with the provisions of Explanation to clause
(e) of Section 2 shall be payable to an employee referred
to in that clause notwithstanding that immediately,
or at any time, before the termination of his employment
in the manner specified in clause (a) or clause (b)
or clause (c) of sub-section (1), he was in receipt
of-
(i) where such termination of
his employment is before the commencement of the Payment
of Gratuity (Amendment) Act, 1984 (25 of 1984), wages
exceeding one thousand rupees per month, and
(ii) where such termination of
his employment is after such commencement, wages exceeding
one thousand and six hundred rupees per month].
NOTES
The Punjab and Haryana High Court
has held the provision in S. 4(1)(b) for eligibility
on voluntary retirement to gratuity after five years
service is ultra rights of computer under Article 19(1)(g)
of the Constitution. Darshan Engineering Works v. Controlling Authority,
(1984) 1 LLN
773; 1983 Lab IC 1451 (P & H) (DB).
Where the management withheld
the gratuity for about 25 years on an unreasonable stand,
the Supreme Court directed the amount of the
gratuity together
with interest @ 15% per annum to be paid to the employee.
Sudhir Chandra
Sarkar v. Tata Iron and Steel Co. Ltd., (1984) 3
SCC 369: 1983 SCC (L & S) 540.
A partnership film converted
itself into a registered company. Its employees were
held entitled to gratuity on the basis of length of
service under both the establishments taken together.
Bommidala
Bros. v.
Authority,
Payment of Gratuity Act, (1989) 1 Cur LR 595 (AP).
An ex-worker's claim to gratuity
under a agreement the provisions of the Act can be enforced
not under Section 4 of the Act but under Section 33-C(2)
of the Industrial Disputes Act, 1947. Dinkar Shankar
Pawar v. Elphinstone Spg. & Wvg. Mills (1986) 2 LLN 1007 (Bom).
The Special Contribution to Provident
Fund under Regulation 37 of T.N. State Electricity Board
Contributory Provident Fund Regulations is not the same
thing as gratuity. Katheeja Bai v. Suprintending Engineer, (1984) 3 SCC 518 : 1984) SCC (L & S) 564.
Supply of free food to employees
is merely an amenity. Hence, its equivalent cannot for
part of wages for calculating the amount of gratuity.
Ambika Saw
Mills, v.
Asst. Labour Commr, (1987) 1 LLN 364 : 1986 Lab IC 1828
(Ori) (DB).
Top |
Footnotes
9. Ins. by Act 26 of 1984, S. 4 (w.e.f.
11-2-1981).
See
also S. 6
of Act 26 of 1984 later.
15. Ins. by Act 25 of 1984, S.
3 and deemed always to have been inserted. |
An employee, whose wages, at
the time of termination of his employment, exceeded
the limit contemplated in Section 2(e) and who otherwise
satisfied-the conditions of Section 4, cannot be dented
gratuity for the period during which he satisfied the
definition of employee under Section 2(e).
Goodyear India
Ltd. v. K.G. Devessar, (!985) 4 SCC 45:1985 SCC (L &
S) 936.
An employee appointed or continuing
in employment after the date of his superannuation is
entitled to gratuity for the full period of service
and not merely up to the age superannuation.
Darshan Engineering
Works v.
Controlling Authority, (1984) 1 LLN 773: 1983 LAB IC
1451.
The "rate of fifteen days'
wages" of an employee mentioned in sub-section
(2) has to be calculated by dividing the monthly wages
last drawn by him by 26 and multiplying the quotient
by 15. Jeewanlal Ltd. . Appellate Authority,
(1984) 4 SCC
356 : 1984 SCC (L & S) 753; Shri Digvijay Woolen
Mills v. Mahendra P Buch, (1980) 4 SCC 106: 1980 SCC
(L & S) 513.
The expression "twenty months"
wages" in subsection (3) means 600 days wages and
not 520 working days wages. Jeewanlal Ltd. v. Appellate Authority, (1984) 4 SCC
356: 1984
SCC (L&S) 753.
Section 4(5) covers future awards,
agreements or contracts with the employer providing
better terms of gratuity. Workmen v. Metro Theatre Ltd.,
(1981) 3 SCC 596: 1981 SCC (L & S) 546.
If a workman is guilty of a serious
misconduct such as acts of violence against the management
or other employees or riotous or disorderly behaviour
in or near the place of employment, which though not
directly causing damage, is conducive to grave indiscipline,
then his gratuity can be forfeited in its entirety.
(1973) 2 SCC 502: 1973 SCC (L & S) 570.
The offence of theft involves
moral turpitude within the meaning of sub-section (6)
(b) (ii). Bharath Gold Mines Ltd.
v. Regional
Labour Commr., (1987) 1LLN 303 (Kant) (DB).
Mere holding back the possession
of official premises does not justify withholding of
gratuity. Ramjilal Chimanlal Sharma v. Elphinstone Spg. & Wvg. Mill Co. Ltd.,
(1985) 1 LLN 228: 1984 Lab IC 1703; Binny Ltd. v. Appellate
Authority. (1984, 2 LLN 439 (Kant).
16[4-A Compulsory Insurance. -(1) With effect from such date
as may be notified by the appropriate Government in
this behalf, every employer, other than an employer
or an establishment belonging to, or under the control
of the Central Government or a State Government, shall,
subject to the provision of sub-section (2), obtain an insurance in
the manner prescribed, for his liability for payment
towards the gratuity under the life measure Corporation
of India Act, 1956 (31 of 956) or any other prescribed
insurer:
Provided that different dates
may be appointed for different establishments or class
of establishments or for different areas.
2. The appropriate Government
may, subject to such conditions as may be prescribed,
exempt every employer who had already established an approved gratuity
fund in respect of his employees and who desires to
continue such arrangement, and every employer employing
five hundred or more persons who establishes an approved
gratuity fund in the major prescribed from the provisions of sub-section (1).
(3) For the purpose of effectively
implementing the provisions of this section, every employer
shall within such time as may be prescribed get his
establishment registered with the controlling authority
in the prescribed manner and no employer shall be registered
under the provisions of this section unless he has
taken an insurance
referred to in sub-section (1) or has established an
approved gratuity fund referred to in sub-section (2).
Top |
Footnote
16. Ins. by Act 22 of 1987, S.
5 ) w.e.f. 1-10-1987). |
(4) The appropriate Government
may, by notification, make rules to give effect to the
provisions of this section and such rules may provide
for the composition of the Board of Trustees of the
approved gratuity fund and for the recovery by the controlling
authority of the amount of the gratuity payable to an
employee from the Life Insurance Corporation of India
or any other insurer with whom an insurance has been
taken under sub-section (I), or as the case may be,
the Board of Trustees of the approved gratuity fund.
(5) Where an employer fails to
make any payment by way of premium to the insurance
referred to in sub-section (I) or by way of contribution
to an approved gratuity fund referred to in sub-section
(2), he shall be liable to pay the amount of gratuity
due under this Act (including interest, if any, for
delayed payments) forthwith to the controlling authority.
(6) Whoever contravenes the provisions
of sub-section (5) 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.
Explanation.-In this section"
approved gratuity fund" shall have the same meaning
as in clause (5) of Section 2 of the Income-tax Act,
1961 (43 of 1961).]
5. Power
to exempt.- 17(1)] The appropriate Government
may, by notification, and subject to such conditions
as may be specified in the notification, 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 if, in the
opinion of the appropriate Government, the employees
in such establishment, factory, mine, oilfield, plantation,
port, railway company or shop are in receipt of gratuity
or pensionary benefits not less favourable than the
benefits conferred under this Act.
17[(2) The appropriate Government
may, be notification and subject to such conditions
as may be specified in the notification, exempt any
employee or class of employees employed in 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, if, in the opinion of
the appropriate Government, such employee or class of
employees are in receipt of gratuity or pensionary benefits
not less favourable than the benefits conferred under
this Act.]
18(3) A notification issued under
sub-section (1) or sub-section (2) may be issued retrospectively
a date not earlier than the date or commencement of
this Act, but no such notifiction shall be issued so
as to prejudicially affect the interests of any person.]
6. Nomination.-(1) Each employee, who has completed
one year of service, shall make, within such time, in
such form and in such manner, as may be prescribed,
nomination for the purpose of the second proviso to
subsection (1) of Section 4.
(2) An employee may, in his nomination,
distribute the amount of gratuity payable to him under
this Act amongst more than one nominee.
Top |
Footnotes
17. Ins. by Act 26 of 1984, S.5.
18. Ins. by Act 22 of 1987, S.6
(w.e.f. 1-10-1987). |
(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, and any nomination
made by such employee in favour of person who is not
a member of his family, shall be void.
(4) If at the time of making
a nomination 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, subject
to the provisions of sub-sections (3) and (4), 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.
7. Determination
of the amount of gratuity.-(1) A person who is eligible
for payment of gratuity under this Act or any person
authorised, in writing, to act on his behalf shall send
a written application to the employer, within such time
and in such form, as may be prescribed, for payment
of such gratuity.
(2) As soon as gratuity becomes
payable, the employer shall, whether an application
referred to in sub-section (1) has been made or not,
determine the amount of gratuity and give notice in
writing to the person to whom the gratuity is payable
and also to the controlling authority specifying the
amount of gratuity so determined.
19[(13) The employer shall arrange
to pay the amount of gratuity within thirty days from
the date it becomes payable to the person to whom the
gratuity is payable.
(3-A) If the amount of gratuity
payable under sub-section (3) is not paid by the employer
within the period specified in sub-section (3), 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 rate19a[not exceeding the rate notified
by the Central Government from time to time for repayment
of long-term deposits, as that Government may, be notification
specify:
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.]
(4) (a) If there is any dispute
as to the amount of gratuity payable to an employee
under this Act or as to the admissibility of any claim
of, or in relation to, an employee for payment of gratuity,
or as to the person entitled to receive the gratuity, the
employer shall deposit with the controlling authority
such amount as he admits to be payable by him as gratuity.
Top |
Footnotes
19. Sub-sections (3) and (3-A)
by Act 22 of 1987, S. 7 (w.e.f. 1-10-1987).
19a. Ten per cent per annum as
the rate of simple interest specified vide Noti. No.S.O.
874(E), dated 1-10-1987. |
Explanation.- 20[*
*
*]
21[(b) Where there is a dispute
with regard to any matter or matters specified in clasue
(a), the employer or employee or any other person raising
the dispute may make an application to the controlling
authority for deciding the dispute.]
22[(c) The controlling authority
shall, after due inquiry and after giving the parties
to the dispute a reasonable opportunity of being heard,
determine the matter or matters in dispute and if, as
a result of such inquiry any amount is found to be payable
to the employee, the controlling authority shall direct
the employer to pay such amount or, as the case may
be, such amount as reduced by the amount already deposited
by the employer.]
22[(d)] The controlling authority
shall pay the amount deposited, including the excess
amount if any, deposited by the employer, to the person
entitled thereto.
23[(e)] As soon as may be after
a deposit is made under clause (a) the controlling authority
shall pay the amount of the deposit-
(i) to the applicant where he
is the employee; or
(ii) where the applicant is not
the employee, to the 15[nominee or as the case may be,
the guardian of such nominee or] heir of the employee
if the controlling authority is satisfied that there
is no dispute as to the right of the applicant to receive
the amount of gratuity.
(5) For the purpose of conducting
an inquiry under sub-section (4), the controlling authority
shall have the same powers as are vested in a court,
while trying a suit, under the Code of Civil Procedure,
1908 (5 of 1908), in respect of the following matters,
namely-
(a) enforcing the attendance
of any person or examining him on oath
(b) requiring the discovery and
production of documents:
(c) receiving evidence on affidavits;
(d) issuing commission for the
examination of witnesses.
(6) Any inquiry under this section
shall be a judicial proceeding with the meaning of
Sections 193 and 228, and for the purpose of Section
196, of the Indian Penal Code, 1860 (45 of 1860)
7. Any person aggrieved by an
order under sub-section (4), may, within sixty days
from the date of the receipt of the order, prefer an appeal to the appropriate
Government or such other authority as may be specified
by the appropriate Government in this behalf:
Provided that the appropriate
Government or the appellate authority, as the case may
be, may if it is satisfied that the appellants was prevented
by sufficient cause from preferring the appeal within
the said period of sixty days, extend the said period
by a further period of sixty days.
Top |
Footnotes
20. Omitted
by Act 25
of 1984,S. 4(w.e.f. 1-7-1984).
21. Ins by Act 25 of 1984, S. 4 (w.e.f 1-7-1984).
22. Subs by Act 25 of 1984, S. 4 (w.e.f. 1-7-1984).
23. Subs by Act 25 of 1984,S. 4 (w.e.f. 1-7-1984). |
24[Provided further that no appeal
by an employer shall be admitted unless at the time
of preferring the appeal, the appellant either produces
a certificate of the controlling authority to the effect
that the appellant has deposited with him an amount
equal to the amount of gratuity required to deposited
under sub-section (4),or deposits with the appellate
authority such amount.]
(8) The appropriate Government
or the appellant authority, as the case may be, may,
after giving the parties to the appeal a reasonable
opportunity of being heard, confirm, modify or reverse
the decision of the controlling authority.
Note.- The expression "determine
the amount of gratuity" includes the determination
of my liability to pay gratuity, Madar Union Sanitorium
and Hospital V. M.B. Sathe, (1986) 1 LLN 916 : (1986) 2
LLJ 135 (RAJ).
Prior to introduction of Section
7(3-A) there was no provision for payment of interest on
delayed payment of gratuity. The controlling authority
was not a court and therefore could not invoke Section
34 of the C.P.C. to award interest. S. 7(3-A) is only
prospective. Charan Singh v. Birla Textiles, (1988)
4 SCC 212: 1988 SCC (L & S) 947.
Section 7(4)(a) does not exclude
a dispute relating to limitation or raising a jurisdictional
issue from being referred to the Controlling Authority,
Binny Ltd.
v. H.K. Madiah, (1986) 2 LLN 530: 1987 Lab IC 931 (Kant).
An application claiming gratuity
under a settlement at a rate higher than the statutory
rate is maintainable under the provision of the Act.
Ramjilal Chimanlal Sharma v. Elphinstone Spg. &
Weaving Mills Co. Ltd. (1985) 1 LLN 228: 1984 Lab IC
1703.
The Appellate Authority cannot
invoke Section 5 of the Limitation Act, 1963 to condone
a delay of more than 120 days in preferring the appeal.
City College,
Calcutta v. State of West Bengal , (1986) 2 LLN 131:
(1987) 1 LLJ 41 (Cal) (DB).
25[7-A. Inspectors.-(1) The appropriate Government
may by notification, appoint as many Inspectors, as
it deems fit, for the purposes of this Act.
(2) The appropriate Government
may by general special order, define the area to which
the authority of an Inspector so appointed shall extend
and where two or more inspections are appointed for
the same area, also provide, by such order, for the
distribution or allocation of work to be
performed
by them under this Act.
(3) Every Inspector Shall be
deemed to be a public servant within the meaning of Section
21 of the Indian Penal Code (45 of 1860).
7-B. Powers of Inspectors.-(1)Subject to any rules made
by the appropriate Government in this behalf, an Inspector
may, for the purpose of ascertaining whether any of
the provisions of this Act or the conditions, if any,
of any exemption granted thereunder, have been complied
with, exercise all or any of the following powers, namely:-
(a) require an employer to furnish
such information as he may consider necessary;
(b) enter and inspect, at all
reasonable hours, with such assistants or any public
authority, as he thinks fit, any premises of or place
in any factory, mine, oilfield, plantation, port, railway
company, shop or other establishment to which this Act
applies, for the purpose of examining any register,
record or notice or other document
required to
be kept or exhibited under this Act or the rule made thereunder, or otherwise
kept or exhibited in relation to the employment of any
person or the payment of gratuity to the employees,
and require the production thereof for inspection;
Top |
Footnotes
24. Ins. by Act 25 of 1984, S.
4 (w.e.f. 1-7-1984).
25.Ins. by Act 25 of 1984, S.
5 (w.e.f. 1-7-1984). |
(c) examine with respect to any
matter relevant to any of the purposes aforesaid, the
employer or any person whom he finds in such premises
or place and who, he has reasonable cause to believe,
is an employee employed therein;
(d) make copies of, or take extracts
from, any register, record notice, or other document,
as he may consider relevant, and where he has reason
to believe that any offence under this Act has been
committed by an employer, search and seize with such
assistance as he may think fit, such register, record,
notice or other document as he may consider relevant
in respect of that offence;
(e) exercise such other powers
as may be prescribed.
(2) Any person required to produce
any register, record, notice or other document or to
give any information by an Inspector under sub-section
(1) shall be deemed to be legally bound to do so within
the meaning of Sections 175 and 176 of the Indian Penal
Code (45 of 1860).
(3) The provisions of the Code
of Criminal Procedure, 1973 (2 of 1974) shall so far
may be, apply to any search or seizure under this sections
they apply to any search or seizure made under the authority
of a warrant issued under Section 94 of that Code].
8. Recovery of gratuity.-If the amount of gratuity payable
under this Act is not paid by the employer, within the
prescribed time, to the person entitled thereto, the
controlling authority shall, on an application made
to it in this behalf by the aggrieved person, issue
a certificate for that amount to the Collector, who
shall recover the same, together with compound interest
thereon 26[at such rate as the Central
Government may, by notification, specify], from the
date of expire of the prescribed time, as arrears of
land revenue and pay the same to the person entitled
thereto.
27[Provided that the controlling
authority shall, before issuing a certificate under
this section, give the employer a reasonable opportunity
of showing cause against the issue of such certificate:
Provide further that the amount
of interest payable under this section shall, in on
case exceed the amount of gratuity payable under this
Act.]
NOTES
The Act is a complete and self-contained
Code and impliedly excludes recourse to any other statute
for payment of gratuity. State of Punjab v. Labour Court, (1980) 1 SCC 4 : 1980 SCC
(L & S) 123. It provides for the decision of all
disputed questions arising under the Act (Ibid)..
In absence of a prescribed period
within which gratuity has to be paid, the date on which
the gratuity becomes payable will be treated at the
prescribed date for its payment, Champaran Sugar Co. Ltd. 1987 Lab IC 47 : (1987) 1 LLN 270.
The right to interest on delayed
payment of gratuity is a statutory right and can be
granted even in absence of an express claim for the
same in the employee's application to the Controlling
Authority. Champaran Sugar Co. Ltd
v. Joint Labour
Commr, 1987
Lab IC 47 : (1987) 1 LLN 270 (Pat) (FB); overruling
Patna Electricity Undertaking v. State of Bihar,
C.W.J.C. No
14 of 1985,dt, 25-7-1985.
It is only when the Collector
issues a certificate for recovery of the dues as a public
demand that interest as provided under Section 8 is
admissible. Charan Singh v. Birla Textiles, (1988) 4 SCC 212: 1988
SCC (L & S) 947.
Top |
Footnotes
26. Subs. by Act 22 of 1987, S.8. (w.e.f. 1-10-1987).
The Govt.. has specified 15% per annum as the rate of
compound interest vide Noti. No. S.O. 1023(E), dated
1.12.1987.
27. Added by Act 22 of 1987 (w.e.f. 1-10-1987). |
9. Penalties.-(1) Whoever, for the purpose
of avoiding any payment to be made by himself under
this Act or of enabling any other person to avoid such
payment, knowingly makes or causes to be made any false
statement or false representation shall be punishable
with imprisonment for a term which may extend to six
months, or with fine which may extend to 28[ten thousand rupees] or with
both.
(2) An employer who contravenes,
or make default in complying with any of the provisions
of this Act or any rule or order made thereunder shall
be punishable with imprisonment for a term 29[which shall not be less than
three months but which may extend to one year, or with
fine which shall not be less than ten thousand rupees
but which may extend to twenty thousand rupees, or with
both]:
Provided that where the offence
relates to non-payment of any gratuity payable under
this Act, the employer shall be punishable with imprisonment for
a term which
shall not be less than
29[six months
but which may extend to two years] unless the court
trying the offence, for reasons to be recorded by it
in writing, is of opinion that a lesser term of imprisonment
or the imposition of a fine would meet the ends of justice.
10. Exemption of
employer from liability in certain cases.-Where an employer is charged
with an offence punishable under this Act, he shall
be entitled, upon complaint duly made by him and on
giving to the complainant not less than three clear
days' notice in writing of his intention to do so, to
have any other person whom he charge as the actual offender
brought before the court at the time appointed for hearing
the charge; and if, after the commission of the offence
has been proved, the employer proves to the satisfaction
of the court-
(a) that he has used due diligence
to enforce the execution of this Act. and
(b) that the said other person
committed the offence in question without his knowledge,
consent or connivance.
That other
person shall
be convicted of the offence and shall be liable to the
like punishment as if he were the employer and the employer
shall be discharged from any liability under this Act in respect of such offence:
Provided that in seeking to prove
as aforesaid, the employer may be examined on oath and
his evidence and that of any witness whom he calls in
his support shall be subject to cross-examination behalf
of the person he charges as the actual offender and
by the prosecutor:
Provided further that, if the
person charged as the actual offender by the employer
cannot be brought before the court at the time appointment
from hearing the charge, the court shall adjourn the
hearing from time to time for a period not exceeding
three months and if by the end of the said period the
person charged as the actual offender cannot still be
brought the court, the court shall proceed to hear the
charge against the employer and shall, if the offence
be proved, convict the employer.
11. Cognizance of offences.-(1) No court shall take cognizance
of any offence punishable under this Act save on a complaint
made by or under the authority of the appropriate Government:
Top |
Footnotes
28.Subs .by Act 22 to 1987, S.9
(w.e.f. 1-10-1987) for "one thousand rupees"
29 Subs. by Act 22 of 1987, S.
9 (w.e.f. 1-10-1987). |
Provided that where the amount
of gratuity has not been paid, or recovered, within
six months from the expire of the prescribed time, the
appropriate Government shall authorise the controlling
authority to make a complaint against the employer,
whereupon the controlling authority shall, within fifteen
days from the date of such authorisation; make such
complaint to a Magistrate having jurisdiction to try
the offence.
(2) No court inferior to that
of a Presidency Magistrate or a Magistrate of the first
class shall try any offence punishable under this Act.
12. Protection
of action taken in good faith.-No suit or other legal proceeding
shall lie against the controlling authority or any other
person in respect of anything which is in good faith
done or intended to be done under this Act or any rule
or order made thereunder.
13. Protection of gratuity.-No gratuity payable under this
Act 30[and no gratuity payable to an employee employed
an any establishment, factory, mine oilfield,
plantation,
port railway company or shop exempted under Section
5[ shall be liable to attachment in execution of any
decree or order of any civil, revenue or criminal court.
14. Act to override other enactments,
etc.-The provisions of this Act or
any rule made thereunder shall have effect notwithstanding
anything inconsistent therewith contained in any enactment
other than this Act or in any instrument or contract
having effect by virtue of any enactment other than
this Act.
NOTES
A regulation of a company providing
for deduction from pension of the amount of gratuity
paid under the Act is invalid. Som Prakash Rekhi v. Union of India, (1981) 1 SCC 449: 1981
SCC (L & S) 200.
Any specific rules for payment
of gratuity, if inconsistent with the Act, shall, to
the extent of such inconsistency, be ineffective. Municipal
Board v Controlling Authority, (1987) 1 LLN 663 (Raj): 1987 Lab IC 575.
15. Power to make rules.-(1) The appropriate Government
may, by notification, make rules for the purpose of
carrying out the provisions of this Act.
(2) Every rule made by the Central
Government under this Act shall be laid, as soon as
may be after it is made, before each House of Parliament
while it is in session, for a total period of thirty
days which may be comprised in one session or in two
or more successive sessions, and if, before the expiry
of the session immediately following the session or
the successive sessions aforesaid, both Houses agree
in making any modification in the rule or both House
agree that the rule should not be made, the rule shall,
there-after have effect only in such modified form or
be of no effect, as the case may be, so, however, that
any such modification or annulment shall be without
prejudice to the validity of anything previously done
under that rule.
Top |
Footnote
30. Ins. by Act 25 of 1984, S.
6 (w.e.f. 1-7-1984). |
Annexure
THE PAYMENT
OF GRATUITY (SECOND AMENDMENT) ACT. 1984
[No.26 OF 1984]
[18th May,1984]
An Act further to amend the
Payment of Gratuity Act, 1972
Be it enacted by Parliament in
the Thirty-fifth Year of the Republic of India as follows:-
1. Short title.-
This Act may be called the Payment
of Gratuity (Second Amendment), Act, 1984.
2-5. [Amendments
incorporated]
6. Validation.-The amendments made in the principal
Act by Sections 3 and 4 shall be deemed to have been
made with effect from the 11th day of February, 1981
and accordingly any action or thing taken or done or
purporting to have been taken or done under the principal
Act on or after said date and before the commencement
of this Act, shall, notwithstanding anything contained
in any judgment, decree or order of any court, tribunal
or other authority, be deemed to be, and to have always
been, for all purposes, as validly and effectively taken
or done as if the said amendments had been in force
at all material times.
Explanation.- For the removal
of doubts, it is hereby declared that no act or omission
on the part of any person, before the commencement of
this Act, shall be punishable as an offence which would
not have been so punishable if this Act had not come
into force.
NOTIFICATION
Ministry of Labour, Noti. No.
S.O. 713 , dated February 24, 1987, published in the Gazette
of India,
Part II, Section 3(ii), dated 14th March, 1987, p. 1097 [No.
S-70025/1/86/SS.II]
In exercise of the powers conferred
by Section 3 of the Payment of Gratuity Act, 1972 (39
of 1972), the Central Government hereby appoints the
officers mentioned in column (2) of the Schedule below
to be the controlling authorities for the areas specified
in the corresponding entries of column (3) of the said
schedule and in relation to all establishments for which
the Central Government is the appropriate Government
under sub-section (i) of clause (a) of Section 2 of
the said Act.
SCHEDULE |
Serial No. |
Officers |
Area |
1 |
2 |
3 |
1. |
Assistant Labour Commissioner,
(Central),Lucknow. |
The State of Uttar Pradesh and
the Union Territory of Delhi. |
2. |
Assistant Labour Commissioner,
(Central), Dibrugarh. |
The State of Assam, Nagaland,
Tripura, Manipur, Mizoram and Arunachal Pradesh. |
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Footnote
1. Received the assent of the
President on May 18, 1984 and published in the Gazette
of India, Extra., Part II, Section 1, dated 18th May,
1984, pp. 1-5. |
THE PAYMENT
OF GRATUITY (CENTRAL) RULES, 1972
1. Short title
and commencement.-(1) These rules may be called
the Payment of Gratuity (Central) Rules, 1972.
(2) These rules shall come into
force on the 16th September, 1972.
2. Definitions.-In these rules, unless there
is anything repugnant in the subject or context,-
(a) "Act" means the
Payment of Gratuity Act, 1972;
(b) "appellate authority"
means the Central Government or the authority specified
by the Central Government under sub-section (7) of Section
7;
(c) "form" means a
form appended to these rules;
(d) "nomination" means
nomination made under Section 6;
(e) "section" means
a section of the Act.
3. Notice of
opening, change or closure of the establishment.-(I) Within thirty days of the
rules becoming applicable to an establishment, a notice
in Form `A' shall be submitted by the employer to the
controlling authority of the area.
(2) A notice in Form `B' shall
be submitted by the employer to the controlling authority
of the area within thirty days of any change in the
name, address, employer or nature of business.
(3) Where an employer intends
to close down the business he shall submit a notice
in form `C' to the controlling authority of the area
at least sixty days before the intended closure.
4. Display
of notice.-(1) The employer shall display
conspicuously a notice at or near the main entrance
of the establishment in bold letters in English and
in a language understood by the majority of the employees
specifying the name of the officer with designation
authorised
by the employer to receive on his behalf notices under
the Act or the rules.
(2) A fresh notice shall be displayed
immediately after the notice referred to in sub-rule
(1) becomes illegible or requires a change.
5. Form of
notice under proviso to Section 2(h)(ii)-(1) A notice under the proviso
to sub-clause (ii) of clause (h) of Section 2 shall
be in Form `D' and sent in triplicate by the employee
to the employer, who shall, after recording its reception
one copy thereof, return the copy to the employee and
send the second copy to the controlling authority of
the area.
(2) An employee may withdraw
the notice referred to in sub-rule (1) by giving another
notice in triplicate in Form `E' to the employer, who
shall follow the same procedure as in sub-rule (1).
6. Nominations.-(1) A nomination shall be in
Form `F' and submitted in duplicate by personal service
by the employee, after taking proper receipt or by sending
through registered post acknowledgment due to the employer,-
(i) in the case of an employee
who is already in employment for a year or more on the
date of commencement of these rules, ordinarily within
ninety days from such date and
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Footnote
1. Vide Noti. No. G.S.R. 412(E),
dated September 16, 1972, published in Gazette of India,
Extra., Part II, Section 3(i), dated 16th September,
1972, pp. 1115-1138/8. |
(ii) in the case of an employee
who completes one year of service after the date of
commencement of these rules, ordinarily, within thirty
days of the completion of one year of service:
Provided that nomination in Form
`F' shall be accepted by the employer after the specified
period, if field with reasonable grounds for delay,
and no nomination so accepted shall be invalid merely
because it was field after the specified period.
(2) Within thirty days of the
receipt of a nomination in Form `F' under sub-rule (1),
the employer shall get the service particulars of the
employee, as mentioned in the form of nomination, verified
with reference to the records of the establishment and
return to the employee, after obtaining a receipt thereof,
the duplicate copy of the nomination in Form `F' duly
attested either by the employer or an officer authorised
in this behalf by him, as taken of recording of the nomination by the
employer and the other copy of the nomination shall
be recorded.
(3) An employee who has on family
at the time of making nomination shall, within ninety
days of acquiring a family submit in the manner specified
in sub-rule (1), a fresh nomination, as required under
sub-section (4) of Section 6, in duplicate in Form `G'
to the employer, and thereafter the provisions of sub-rule
(2) shall apply mutatis mutandis as if it was made under sub-rule (1).
(4) A notice of modification
of a nomination, including cases where a nominee predeceases
an employee, shall be submitted in duplicate in Form
`H' to the employer in the manner specified in sub-rule
(1), and thereafter the provisions of sub-rule (2) shall
apply mutandis as if it was made under sub-rule (1).
(5) A nomination or a fresh nomination
or a notice of modification of nomination shall be signed
by the employee or, if illiterate, shall bear his thumb-impression,
in the presence of two witnesses, who shall also sign
a declaration to that effect in the nomination, fresh
nomination or notice of modification of nomination,
as the case may be.
(6) A nomination, fresh nomination or notice of
modification of nomination shall take effect from the
date of receipt thereof by the employer.
7. Application
for gratuity.-(1) An employee who is eligible
for payment of gratuity under the Act, or any person
authorised in writing, to act on his behalf, shall apply,
ordinarily within thirty days from the date the gratuity
became payable, in Form `I' to the employer:
Provided that where the date
of superannuation or retirement of an employee is known,
the employee may apply to the employer before thirty
days of the date of superannuation or retirement.
(2) A nominee of an employee
who is eligible for payment of gratuity under the second
proviso to sub-section (1) of Section 4 shall apply,
ordinarily within thirty days from the date the gratuity
became payable to him, in Form `J' to the employer:
Provided that an application
in plain paper with relevant particulars shall also
be accepted. The employer may obtain such other particulars
as may be deemed necessary by him.
(3) A legal heir of an employee
who is eligible for payment of gratuity under the second
proviso to sub-section (1) of Section 4 shall apply,
ordinarily within one year from the date the gratuity
become payable to him in From `K' to the employer.
(4) Where gratuity becomes payable
under the Act before the commencement of these rules
the periods of limitation specified in sub-rules (1),
(2) and (3) shall be deemed to be operative from the
date of such commencement.
(5) An application for payment
of gratuity field after the expiry of the periods specified in this
rule shall also be entertained by the employer, if the
applicant adduces sufficient cause for the delay in
preferring his claim, and no claim for gratuity under
the Act shall be invalid merely because the claimant
failed to present his application within the specified
period. Any dispute in this regard shall be referred
to the controlling authority for his decision.
(6) An application under this
rule shall be presented to the employer either by personal
service or by registered post acknowledgment due.
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8. Notice for
payment of gratuity.-(1) Within fifteen days of the
receipt of an application under Rules 7 for payment
of gratuity, the employer shall-
(i) if the claim is found admissible
on verification, issue a notice in Form `L' to the applicant
employee, nominee or legal heir, as the case may be,
specifying the amount of gratuity payable and fixing
a date, not being later than the thirtieth day after
the date of receipt of the application, from payment
thereof, or
(ii) if the claim for gratuity
is not found admissible, issue a notice in form `M'
to the applicant employee, nominee or legal heir, as
the case may be specifying the reasons why the claim
for gratuity is not considered admissible.
In either case a copy of the
notice shall endorsed to the controlling authority.
(2) In case payment of gratuity
is due to be made in the employer's office, the date
fixed for the purpose in the notice in Form `L' under
clause (i) of sub-rule (I) shall be re-fixed by the
employer, if a written application in this behalf is
made by the payee explaining why it is not possible
for him to be present in person on the date specified.
(3) If the claimant for gratuity
is a nominee or a legal heir, the employer may ask for
the such witness or evidence as may be deemed relevant
from establishing his identify or maintainability of
his claim as the case may be. In that case the time-limit
specified for issuance of notice under sub-rule (1) shall be operative with
effect from the date such witness or evidence as the
case may be called for by the employer is furnished
to the employer.
(4) A notice in Form `L' or Form
`M' shall be served on the applicant either by personal
service after taking receipt or by registered post with
acknowledgment due.
(5) A notice under sub-section
(2) of Section 7 shall be in the Form `L'.
9. Mode of
payment of gratuity.- The gratuity payable under
the Act shall be paid in cash or, if so desired by the
payee, in Demand Draft or Bank Cheque to the eligible
employee, nominee or legal heir, as the case may be;
Provided that in case the eligible
employee, nominee or legal heir, as the case may be,
so desires and the amount of gratuity payable is less
than one thousand rupees, payment may be made by postal
money order after deducting the postal money order commission
thereof from the amount payable:
Provided further that intimation
about the details of payment shall also be given by
the employer to the controlling authority of the area:
1[Provided further that in the
case of nominee, or an heir, who in minor, the controlling
authority shall invest the gratuity amount deposited
with him for the benefit of such minor in term deposit
with the State Bank of India or any of its subsidiaries
or any Nationalised Bank.
Explanation:
"Nationalised
Bank" means a corresponding new bank specified
in the First Schedule to the Banking Companies (Acquisition
and transfer of Undertakings) Act, 1970 (5 of 1970).
or a corresponding new bank specified in the First Schedule
of the Banking companies (Acquisition and Transfer of
Undertakings) Act, 1980 (40 of 1980)
10. Application to controlling
authority for direction.-(1) If an employer-
(i) refuses to accept a nomination
or to entertain an application sought to be filed under
Rule 7, or
(ii) issues a notice under sub-rule
(1) of Rule 8 either specifying an amount of gratuity
which is considered by the applicant less than what
is payable or rejecting eligibility to payment of gratuity,
or
(iii) having received an application
under Rule 8 within the time specified therein.
The claimant employee, nominee
or legal heir, as the case may be, may with in ninety
days of the occurrence of the cause for the application,
apply, in From `N' to the controlling authority for
issuing a direction under sub-section (4) of Section
7 with as many extra copies as are the opposite parties:
Provided that the controlling
authority may accept any application under this sub-rule,
on sufficient cause being shown by the applicant after
the expiry of the specified period.
(2) Application under sub-rule
(1) and other documents relevant to such an application
shall be presented in person to the controlling authority
or shall be sent by registered post acknowledgment due.
11. Procedure
for dealing with application for direction.-(1) On receipt of an application
under Rule 10 of the controlling authority shall, by
issuing a notice in Form `O', call upon the applicant
as well as the employer to appear before him on a specified
date, time and place, either by himself or through his
authorised representative together with all relevant
documents and witnesses, if any.
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Footnote
1. Ins. by Noti. No. G.S.R. 77, dated 22.1.1991
(w.e.f.1.2.1991). |
(2) Any person desiring to act
on behalf of an employer or employee, nominee or legal
heir, as the case may be, shall present to the controlling
authority a letter of authority from the employer or
the person concerned, as the case may be, on whose behalf
he seeks to act together with a written-statement explaining
his interest in the matter and praying for permission
so to act. The controlling authority shall record thereon
an order either according his approval or specifying,
in the case of refusal to grant the permission prayed
for, the reasons for the refusal.
(3) A party appearing by an authorised
representative shall be bound by the acts of the representative.
(4) After completion of hearing
on the date fixed under sub-rule (1), or after such
further evidence, examination of documents, witnesses,
hearing and enquiry, as may be deemed necessary, the
controlling authority shall record his finding as to
whether any amount is payable to the applicant under
the Act. A copy of the finding shall be given to each
of the parties.
(5) If the employer concerned
fails to appear on the specified date of hearing after
due service of notice without sufficient cause, the
controlling authority may proceed to hear and determine
the application ex parte. If the applicant fails to appear
on the specified date of hearing without sufficient
cause, the controlling authority may dismiss the application:
Provided that an order under
this sub-rule may, on good cause being shown within
thirty days of the said order be reviewed and the application
re-heard after giving not less than fourteen days notice
to the opposite party of the date fixed for re-hearing
of the application.
12. Place and
time of hearing.-The sittings of the controlling
authority shall be held at such times and at such places
as he may fix and he shall inform the parties of the
same in such manner as he thinks fit.
13. Administration
of oath.-The controlling authority may
authorise a clerk of his office to administer oaths
for the purpose of making affidavits.
14. Summoning
and attendance of witness.-The controlling authority may,
at any stage of the proceedings before him, either upon
or without an application by any of the parties involved
in the proceedings before him, and on such terms as
may appear to the controlling authority just, issue
summons to any person in Form `P' either to give evidence
or to produce documents or for both purposes on a specified
date, time and place.
15. Service
of summons or notice.-(1) Subject to the provisions
of sub-rule (2) any notice, summons, process or order
issued by the controlling authority may be served either
personally or by registered post acknowledgment due
or in any other manner as prescribed under the Code
of Civil Procedure, 1908 (Act 5 of 1908).
(2) Where there are numerous
persons as parties to any proceeding before the controlling
authority and such persons are members of any trade
union or association or are represented by an authorised
person, the service of notice on the Secretary, or where
there is no Secretary, on the principal officer of the
trade union or association, or on the authorised person
shall be deemed to be service on such persons.
16. Maintenance
of records of cases by the controlling authority.-(1) The controlling authority
shall record the particulars of each case under Section
7, in Form `Q' and at the time of passing order shall
sign and date particulars so recorded.
(2) The controlling authority
shall, while passing orders in each case, also record
the findings on the merits of the case and file it together
with the memoranda of evidence with the order sheet.
(3) Any record, other than a
record of any order or direction, which is required
by these rules to be signed by the controlling authority,
may be signed on behalf of and under the direction of
the controlling authority by any subordinate officer
appointed in writing for this purpose by the controlling
authority.
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17. Direction
for payment of gratuity.-If a finding is recorded under
sub-rule (4) of Rule 11 that the applicant is entitled
to payment of gratuity under the Act, the controlling
authority shall issue a notice to the employer concerned
in Form `R' specifying the amount payable and directing
payment thereof
to the applicant under intimation to the controlling
authority within thirty days from the date of receipt
of the notice by the employer. A copy of the notice
shall be endorsed to the applicant employee, nominee
or legal heir, as the case may be.
18. Appeal.-(1) The Memorandum of appeal
under sub-section (7) of Section 7 of the Act shall
be submitted to the appellate authority with a copy
thereof to the opposite party and the controlling authority
either through delivery in person or under registered
post acknowledgment due.
(2) The Memorandum of appeal
shall contain the facts of the case, the decision of
the controlling authority, the grounds of appeal and
the relief sought.
(3) There shall be appended to
the Memorandum of appeal a certified copy of the finding
of the controlling authority and direction for payment
of gratuity.
(4) On receipt of the copy of
Memorandum of appeal, the controlling authority shall
forward records of the case to the appellate authority.
(5) Within 14 days of the receipt
of the copy of the Memorandum of appeal, the opposite
party shall submit his comments on each paragraph of
the memorandum with additional pleas, if any, to the
appellate authority with a copy to the appellant.
(6) The appellate authority shall
record its decision after giving the parties to the
appeal a reasonable opportunity of being heard. A copy
of the decision shall be given to the parties to the
appeal and a copy thereof shall be sent to the controlling
authority returning his records of the case.
(7) The controlling authority
shall, on receipt of the decision of the appellate authority,
make necessary entry in the records of the case maintained
in Form `Q' under sub-rule (1) of Rule 16.
(8) On receipt of the decision
of the appellate authority, the controlling authority
shall, if required under that decision, modify his direction
for payment of gratuity and issue a notice to the employer
concerned in Form `S' specifying the modified amount
payable and directing payment thereof to the applicant,
under intimation to the controlling authority within
fifteen days of the receipt of the notice by the employer.
A copy of the notice shall be endorsed to the applicant
employee, nominee or legal heir, as the case may be,
and to the appellate authority.
19. Application for recovery of gratuity.-Where
an employer fails to pay the gratuity due under the
Act in accordance with the notice by the controlling
authority under Rule 17 or Rule 18, as the case may
be, the employee concerned, his nominee or legal heir,
as the case may be, the employee concerned, his nominee
or legal heir, as the case may be, to whom the gratuity
is payable may apply to the controlling authority in
duplicate in Form `T' for recover there of under Section
8 of the Act.
20. Display of abstract of the
Act and Rules.-The employer shall display an abstract
of the Act and the Rules made thereunder [as given in
Form `U']2 in English and in the language understood
by the majority of the employees at a conspicuous place
at or near the main entrance of the establishment.
FORM
`U' 1
ABSTRACT OF
THE ACT AND RULES
1. Extent of
the Act.-The Act extends to the whole
of India:
Provided that i so far as it
relates to plantations or ports, it shall not extend
to the State of Jammu and Kashmir. (Section 1(2)]
2. To whom
the Act Applies.-The Act applies to (a) every
factory, mine, oil field 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 State, in which ten or
more persons are employed, or were employed, on any
day of the preceding twelve months; and (c) such other
establishments or class of establishments, in the 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.
[Section 1(3)]
3. Definitions-(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,
(c) of a factory belonging
to, or under the control of, the Central Government,
(d) of a major port, mine, oil field or railway company,
the Central government,
(ii) in any other case, the State
Government. [Section 2(a)].
(b) "Completed year of service"
means continuous service for one year. [Section 2(b)].
(c) "Continuous Service"
means uninterrupted service and includes service which
is interrupted by sickness, accident leave, lay-off
strike or a lock-out or cessation of work not due to
any fault of the employees concerned, whether such un-interrupted
or interrupted service was rendered before or after
the commencement of this Act.
Explanation I.- In the case of
an employee who is not in unmterrupted service for one
year, he shall be deemed to be in continuous service
if he has been actually employed by an employer during
the twelve months immediately preceding the year for
not less than-
(i)
190 days, if employed below the ground in a mine, or
(ii) 240 days, in any other case, except when he is
employed in a seasonal establishment.
Explanation II.- An employee
of a seasonal establishment shall be deemed to be in
continuous service if he has actually worked for not
less than seventy-five per cent of the number of days
on which the establishment was in operation during the
year. [Section 2(d)].
(d) "Controlling authority"
means authority appointed by an appropriate Government
under Section 3. [Section 2(d)]
(e) "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 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 the predeceased son, if any;
Provided that if a female employee,
by a notice in writing to the controlling authority,
expresses her desire to exclude her husband from her
family, the husband and his dependent parents shall
no longer be deemed, for the purposes of this Act, to
be included in the family of such female employee unless
the said notice is subsequently withdrawn by such female
employee.
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. [Section 2(h)].
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Footnote
3. Ins. by Noti. No. GSR 2868,
dated 22 nd November 1975. |
4. Nomination.-(1) Each employee, who has completed
one year of service, after the commencement of the Payment
of Gratuity (Central) Rules, 1972 shall make within
thirty days of completion of one year of service, a
nomination. [Section 6(1) read with Rule 86(1).].
(2) 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
and any nomination made by such employee in favour of
a person who is not a member of his family shall be void.
[Section 6(3)].
(3) If at the time of making
a nomination, the employee has no family, the nomination
can 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 90 days fresh nomination in favour
of one or more members of his family.
[Section 6(4) read with Rule
6(3)].
(4) A nomination or a fresh nomination
or a notice of modification of nomination shall be signed
by the employee or, if illiterate, shall bear his thumb-impression
in the presence of two witness, who shall also sign
declaration to that effect in that nomination, fresh
nomination or notice of modification of nomination as
the case may be . (Rule 6(5)].
(5) A nomination may, subject
to the provisions of sub-sections (3) and (4) of Section
6 be modified by an employee any time after giving to
his employer a written notice of his intention to do
so. [Section 6(5)].
(6) A nomination or fresh nomination
or notice of modification of nomination shall take effect
from the date of receipt of the same by the employer.[Rule
6(6)].
5. Application
for gratuity.-(1) An employee who is eligible
for payment of gratuity under the Act, or any person
authorised, in writing, to act on his behalf, shall
apply ordinarily within thirty days from the date gratuity
become payable:
Provided that where the date
of superannuation or retirement of an employee is known,
the employee may apply to such employer before thirty
days of the date of supernnuation or retirement. [Rule
7(2)].
(2) A nominee of an employee
who is eligible for payment of gratuity shall apply,
ordinarily within thirty days from the date of the gratuity
became payable to him, to the employer. [Rule 7(3)].
(4) An application for payment
of gratuity field after the expire of the periods specified
above shall also be entertained by the employer if the
applicant adduces a sufficient cause for the delay.
[Rule 7(5)].
6. Payment
of gratuity.-(1) 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, or
(b) on his
retirement or resignation, or
(c) on his death or
disablement due to accident or disease:
Provided that the completion
of continuous service of five years shall not be necessary
where the termination of the employment of any employee
is due to death or disablement.
Disablement means such disablement
which incapacitates an employee for the work which he
was capable of performing before the accident or disease
resulting in such disablement. [Section 4(1)].
(2) For every completed year
of service or part thereof in excess of six months,
the employer shall pay gratuity to an employee at the
rate of fifteen days' wages based on the rate of wages
last drawn by the employee concerned:
Provided that in the case of
a piece-rated employee, daily wages shall be computed
on the average of the total wages received by him for
a period of
three months immediately proceeding the termination
of his employment, and, for his purpose, the wages paid
for any overtime work shall not be taken into account:
Provided further that in the
case of an employee employed in a seasonal establishment,
the employer shall pay the gratuity at the rate of seven
days' wages for each season. [Section 4(2)].
(3) The amount of gratuity payable
to an employee shall not exceed twenty months wages. [Section 4(3)].
7. Forfeiture
of gratuity.-(1) The gratuity of an employee,
whose services have been terminated for any act, willful
omission or negligence causing any damage or loss to,
or destruction of, property belonging to the employer,
shall be forfeited to the extend of the damage or loss
so caused.
(2) The gratuity payable to an
employee shall wholly be forfeited-
(a) if the services of such employee
have been terminated for his riotous or disorderly conduct
or of any other act of violence on his part, or
(b) if the services of such employee have been terminated
for any act which constitutes an offence involving moral
turpitude, provided that such offence is committed by
him in the course of his employment. [Section 4(6)].
8. Notice of
opening, change or closure of the Establishment.-(1) A notice shall be submitted
by the employer to the controlling authority of the
area within thirty days of any change in the name, address,
employer or nature of business. [Rule 3(2)].
(2) Where an employer intends
to close down the business he shall submit a notice
to the controlling authority of the area at least sixty
day's before the intended closure. [Rule 3(3)].
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9. Application
to Controlling Authority for direction.-It an employer-
(i) refuses to accept a nomination
or to entertain an application for payment of gratuity,
or
(ii) issues a notice either specifying
an amount of gratuity which is considered by the applicant
less than what is payable or rejecting eligibility to
payment of gratuity, or
(iii) having received an application
for payment of gratuity, fails to issue notice within
fifteen days; the claimant employee, nominee, or legal
heir, as the case may be, may within ninety days of
the occurrence of the cause for the application, apply
to the controlling authority for issuing a direction
under sub-section (4) of Section 7 with as many extra
copies as are the opposite party:
Provided that the controlling
authority may accept any application
on sufficient
cause being shown by the applicant, after the expire
of the period of ninety days. [Rule 10].
10. Appeal.-Any person aggrieved by an order
of the controlling authority may, within sixty days
from the date of the receipt of the order, prefer an
appeal to the Regional Labour Commissioner (Central)
of the area, who has been appointed as the appellate
authority by the Central Government:
Provided that the appellate authority
may, if it is satisfied that the appellant was prevented
by sufficient cause from preferring the appeal within
the said period of sixty days, extend the said period
by a further period of sixty days. [Section 7(7)].
11. Machinery
for enforcement of the Act or Rules in Central sphere.-All Assistant Labour Commissioners
(Central) have been appointed as Controlling Authorities
and all the Regional Labour Commissioners (Central)
as Appellate Authorities.
12. Powers
of the Controlling Authority.-The Controlling Authority for
the purpose of conducting an inquiry as to the amount
of gratuity payable to an employee or as to the admissibility
of any claim of, or in relation to, an employee for
payment of gratuity, or as to the person entitled to
receive the gratuity, shall have same powers as are
versed in a court, under the Code of Civil Procedure,
1908, in respect of the following matters, namely-
(a) enforcing the attendance
of any person or examining him on oath;
(b) requiring the discovery and
production of documents;
(c) receiving evidence on affidavits;
and
(d) issuing commissions for the
examination of witnesses. [Section 7(5)].
13. Recovery
of gratuity.-If the amount of gratuity payable
is not paid by the employer, within the prescribed time,
to the person entitled thereto the controlling authority
shall, on an application made to it in this behalf by
the aggrieved person, issue a certificate for that amount
to the Collector, who shall recover the same, together
with compound interest thereon at the rate of nine per
cent per annum, from the date of expiry of the prescribed
time, as arrears of land revenue and pay the same to
the person entitled thereto.[Section 8].
14. Protection
of gratuity.-No gratuity payable under the
Payment of Gratuity Act and the rules made thereunder
shall be liable to attachment in execution of any decree
or order of any civil, revenue or criminal court. [Section
13].
15. Penalties
for offences.-(1) Whoever, for the purpose
of avoiding any payment to be made by himself or of
enabling any other persons to avoid such payment, knowingly
makes or causes to be made any false statement or false
representation shall be punishable with imprisonment
for a term which may extend to six months, or with fine
which may extend to one thousand rupees or with both.
[Section 9(1)].
(2) An employer who contravenes,
or makes default in complying with, any of the provisions
of the Act or any rule or order made thereunder shall
be punishable with imprisonment for a term which may
extend one year, or with fine which may extend to one
thousand rupees, or with both:
Provided that if the offence
relates to non-payment of any gratuity payable under
the Payment of Gratuity Act, the employer shall be punishable
with imprisonment for a term which shall note be see
than three months unless the court trying the offence
for reasons to be recorded by it in writing, is of opinion
that a lesser term of imprisonment or the imposition
of a fine would meet the ends of justice. [Section 9(2)].
16. Display
of Notice.-The employer shall display conspicuously
a notice at or near the main entrance of the establishment
in bold letters in English and in the language understood
by the majority of the employees specifying the name
of the Officer with designation authorised by the employer
to receive on his behalf notices under the Payment of
Gratuity Act or the rules made thereunder. [Rule 4].
17. Display
of Abstract of the Act and Rules.-The employer shall display an
abstract of the Payment of Gratuity Act and the rules
made thereunder in English and in the language understood
by the majority of the employees at a conspicuous place
at or near the main entrance of the establishment. [Rule
20].
STATE RULES
For State Rules, see K.D. SRIVASTAVA'S COMMENTARIES
ON PAYMENT OF GRATUITY Act, 1972, 4th Edn., (1988) where
the following are included:
1.
Payment of
Gratuity (Andhra Pradesh) Rules, 1972
2.
Payment of
Gratuity (Assam) Rules, 1972
3.
Payment of
Gratuity (Bihar) Rules, 1972
4.
Payment of
Gratuity(Delhi) Rules, 1972
5..
Goa, Daman
& Diu Paymnent of Gratuity Rules, 1973
6.
Payment of
Gratuity (Gujarat) Rules, 1973
7.
Haryana Payment
of Gratuity Rules, 1972
8.
Payment of
Gratuity (Karnataka) Rules, 1972
9.
Kerala Payment
of Gratuity Rules, 1973
10.
Payment of
Gratuity (Madhya Pradesh) Rules, 1973
11.
Payment of
Gratuity (Maharashtra) Rules. 1972
11.A Payment of Gratuity (Orissa)
Rules.
12.
Pondicherry
Payment of Gratuity Rules, 1973
13.
Payment of
Gratuity (Punjab) Rules, 1973
14.
Rajasthan
Payment of Gratuity Rules, 1973
15.
Payment of
Gratuity (Tamil Nadu) Rules, 1973
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