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    Payment of Gratuity Act, 1972.

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    arpit0104
    This document summarizes the key aspects of the Payment of Gratuity Act of 1972 in India. It defines gratuity as a retirement benefit paid to employees after long and faithful service of at least 5 years. The act mandates that employers in organizations with 10 or more employees must pay gratuity equivalent to 15 days of wages for each completed year of service, up to a maximum amount. It outlines rules for nominations, forfeiture conditions, recovery of unpaid gratuity, and penalties for non-compliance. The purpose of the act is to provide a social security benefit to employees after retirement from long service at an organization.

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    Payment of Gratuity Act, 1972.

    Uploaded by

    arpit0104
    435 views15 pages
    This document summarizes the key aspects of the Payment of Gratuity Act of 1972 in India. It defines gratuity as a retirement benefit paid to employees after long and faithful service of at least 5 years. The act mandates that employers in organizations with 10 or more employees must pay gratuity equivalent to 15 days of wages for each completed year of service, up to a maximum amount. It outlines rules for nominations, forfeiture conditions, recovery of unpaid gratuity, and penalties for non-compliance. The purpose of the act is to provide a social security benefit to employees after retirement from long service at an organization.

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    This document summarizes the key aspects of the Payment of Gratuity Act of 1972 in India. It defines gratuity as a retirement benefit paid to employees after long and faithful service of at least 5 years. The act mandates that employers in organizations with 10 or more employees must pay gratuity equivalent to 15 days of wages for each completed year of service, up to a maximum amount. It outlines rules for nominations, forfeiture conditions, recovery of unpaid gratuity, and penalties for non-compliance. The purpose of the act is to provide a social security benefit to employees after retirement from long service at an organization.

    Copyright:

    © All Rights Reserved
    Download as PPTX, PDF, TXT or read online from Scribd
    Download as pptx, pdf, or txt
    435 views15 pages

    Payment of Gratuity Act, 1972.

    Uploaded by

    arpit0104
    This document summarizes the key aspects of the Payment of Gratuity Act of 1972 in India. It defines gratuity as a retirement benefit paid to employees after long and faithful service of at least 5 years. The act mandates that employers in organizations with 10 or more employees must pay gratuity equivalent to 15 days of wages for each completed year of service, up to a maximum amount. It outlines rules for nominations, forfeiture conditions, recovery of unpaid gratuity, and penalties for non-compliance. The purpose of the act is to provide a social security benefit to employees after retirement from long service at an organization.

    Copyright:

    © All Rights Reserved
    Download as PPTX, PDF, TXT or read online from Scribd
    Download as pptx, pdf, or txt
    of 15

    PAYMENT

    OF
    GRATUITY ACT, 1972
    BY-:
    ARPIT GUPTA
    ROLL NO.- 15001116008
    MBA [HR&IR] 2014-16

    BASIC UNDERSTANDING
    A kind of retirement benefit.
    It is a payment that is intended to help an

    employee after his retirement.


    General principle - for faithful service over
    a long period the employee is entitled to
    claim a
    certain amount as retirement benefit
    Earned by an employee for long & faithful
    service

    Enactment of Payment of
    Gratuity Act 1972
    Proposal for enactment was discussed in parliament in

    August 72 . It came into existence in Sept.72


    The Act provides for compulsory Payment of Gratuity by
    the mngt. To the all employees in factories , plantations,
    mines, oil fields, ports, railway companies, other
    establishments employing ten or more persons in the
    event of superannuation, retirement, resignation and
    death or disablement due to accident or disease. The
    quantum of gratuity will be 15 days wages based on at
    the rate of wages last drawn by the employees concerned
    for every completed year of service or part thereof in
    excess of 6 months (subject to max. of Rs. 2.5 lakhs)

    DEFINITIONS-:
    Appropriate Govt. In relation to an establishment:

    a)Belonging to, or under the control of CG


    b)Having branches in more than one state.
    c)Of a major port, mine, oilfield or railway company, the
    Central Govt.
    In any other case, the State Government
    Controlling Authority: means an authority appointed by
    AG . The AG by notification published in the official
    Gazatee appoint any officer to be a controlling
    authority , who shall be responsible for the
    administration of the Act. Diff. controlling authorities
    may be appointed for different areas.

    CONTD
    Employee means any person(other than an

    apprentice) employed on wages(not exceeding


    Rs. 1,600/- per month) has been omitted, in
    any establishment , factory, mine oilfield,
    plantation, RW co. or shop , to do any skilled,
    semi-skilled, or unskilled, manual, supervisory,
    technical or clerical work, whether the terms of
    such employment are express or implied and
    whether or not such person es employed in a
    managerial or administrative capacity but does
    not any such person who holds a post under
    CG/SG & is governed by any other Act or by
    any rules providing for payment of gratuity.

    CONTD.
    It is a payment that is intended to help an

    employee after his retirement whether the


    retirement is due to super-annuation or due to
    some physical disability.
    Formula Of Gratuity =(Last Month Wages
    *15*No. of years of Services)/26
    1. Gratuity should be paid to an employee on
    the termination of his employment after he has
    rendered service for not less than 5 yrs on his super-annuation
    his retirement
    his resignation

    CONDITIONS-:
    1.Completion of continuous services of five years
    is not necessary when the termination of
    employee is due to death of disablement.
    In case of death of employee gratuity payable
    to him is paid to his nominee.
    2. For every completed year of service or part, the
    employer shall pay gratuity to the employee at
    the rate of fifteen days wages based on the rate
    of wages last drawn by the employee
    concerned:
    But in case of piece rated employee , daily wages
    shall be computed on the avg. of the total wages
    recd. By him for a period of 3 months.

    CONTD
    3. The amount of gratuity payable to an employee shall not
    exceed three lakhs and fifty thousand rupees
    4. For computation of 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
    wages recd. By him during that period & his wages for the
    period subsequent to his disablement shall be taken to be the
    wages as so reduced.
    5. Forfeiture of Gratuity(a)of an employee whose service has
    been terminated for any act, wilful omission/negligence causing
    any damage or loss to , or destruction of property belonging to
    the employer , shall be forfeited to the extent of damage or
    loss
    (b) The gratuity payable to an employee shall be wholly forfeited
    If the services of such employee have been terminated for the
    (i)riotous or disorderly conduct/violence(ii) for moral turpitude

    NOMINATION-:
    1.Each employee will nominate person after completion
    of 1 yr. of service , within 90 days
    2.Can distribute amount more than one nominee
    3. If an employee has a family at the time of making a
    nomination, the nomination shall be made in favor of
    one or more member of his family If any nomination is
    made by an employee in favor of a person who is not
    the member of his family, shall be void.
    4. If the employee acquires a family after making a
    nomination then such nomination become invalid, and a
    fresh nomination is made in favor of a family member.
    5. Every nomination , fresh nomination or alternation of
    nomination shall be sent by the employee to his
    employer

    Determination of the Amount of Gratuity


    An employee who is eligible for payment of gratuity can

    give an application in writing to the employer within 30


    days from the date the gratuity becomes payable
    Employer determine the amount of the gratuity and give
    notice to controlling authority and the employee.
    Employer Failed to pay the amount of gratuity to the
    employee on due date , employer have to pay interest
    on it at the rate decided by CG time to time
    If disputes arises regarding the amount of the gratuity
    and the claim taken by nominee the employer deposit
    the amount to controlling authority & after due inquiry ,
    CA shall pay the amount deposited including the excess
    amount, if any , to the person entitled thereto.

    INSPECTORS-:
    Appointed by the Government for the purpose of this

    act.
    Two or more inspector can be appoint for the same
    area.
    Every Inspector shall be deemed to be a public
    servant within the meaning of section 21, of the IPC,
    1860.
    Powers of the Inspectors
    Ask for any information from the employer.
    Examining any register, record or notice or other
    documents.
    Search and seize register, record, notice or other
    document in respect of offence

    RECOVERY OF GRATUITY
    Controlling authority issued certificate to

    the collector on behalf of aggrieved party.


    Collector recover the amount together with
    compound interest.
    Amount of interest should not exceed the
    amount of gratuity
    Government has no power either to stay
    recovery or grant installment facilities to
    employer in making payment.

    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 6 m. or fine may extend to
    Rs. 10000/ or with both.
    2) An employer who contravenes, or makes default in
    complying with, any of the provisions of this Act or any
    rule or order made there under shall be punishable with
    imprisonment for a term which shall not be less than
    three months but which may extend to one year, or with
    fine which shall not be less than Rs.10000/- which may
    extend to Rs. 20000/-or with both

    PROTECTION OF GRATUITY-:

    No gratuity payable under this Act and no gratuity payable to an

    employee employed in an establishment, factory, mine, oilfield,


    plantation, port, railway
    company or shop exempted under section shall be liable to
    attachment in execution of any decree or order of an civil,
    revenue or criminal court

    Power to make Rules

    The appropriate Government may, by notification make rules for


    the
    purpose of carrying out the provisions of this Act.

    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

    U
    O
    Y
    K
    N
    A
    TH

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