Your SlideShare is downloading. ×
Payment of gratuity act 1972
Upcoming SlideShare
Loading in...5

Thanks for flagging this SlideShare!

Oops! An error has occurred.


Saving this for later?

Get the SlideShare app to save on your phone or tablet. Read anywhere, anytime - even offline.

Text the download link to your phone

Standard text messaging rates apply

Payment of gratuity act 1972


Published on

an brief of Gratuity Act

an brief of Gratuity Act

  • Be the first to comment

No Downloads
Total Views
On Slideshare
From Embeds
Number of Embeds
Embeds 0
No embeds

Report content
Flagged as inappropriate Flag as inappropriate
Flag as inappropriate

Select your reason for flagging this presentation as inappropriate.

No notes for slide


  • 1. • Latin word – Gratuitous• Gratuity means a lump sum payment made by anemployer as the retrial reward for his past service whenhis employment is terminated
  • 2.  Retiring benefit-Long and Unblemishedservice
  • 3. except Shop and establishment covered under SHOPS ANDESTABLISHMENT ACT- 10 or more persons - immediatelypreceding to 12 months. Once this act applies – continue to be governed –irrespective of no of persons It shall come into force on such date as the central governmentmay by notification , appoint
  • 4.  Employee does not include- holds post under centralor state government Teacher cannot be called as employee due to amendmentof this act
  • 5.  Continuous Service” means uninterrupted servicewhich may be interrupted on account of sickness ,accident , leave , absence from duty without leave(notbeing treated as break in service),lay-off , strike , lock-out or cessation of work not due to the fault of theemployee. Whether such uninterrupted or interrupted servicewas rendered before or after the commencement of theAct
  • 6.  If an employee is not in continuous service within the meaningof CLASS-1 he shall deemed to be in continuous service. For a period of 1 year :  190 Days, if the employee was employed below the ground in a mine  190 Days ,if the employee was employed in an establishment which works for less than 6 days in a week  240 Days, in any other case
  • 7. For a period of 6 months :  95 Days , if the employee was employed below the ground in a mine  95 Days , If the employee was employed in an establishment which works for less than 6 days in a week  120 Days , In any other case
  • 8. Gratuity is payable when there is :-  Continuous service of 5 yrs(not necessary incase of death or disablement)  Incase of death ,the amount shall be paid to nominee or legal heir  Time limit- Within 30 days of gratuity becoming payable  Maximum Amount-The gratuity payable to an employee shall not exceed Rs. 10,00,000
  • 9.  It is mandatory where number of employees is morethan 500 The registration shall be done in prescribed time & inprescribed manner The insurance shall be taken from LIC or any otherprescribed insurance company However , employer of an establishment belonging toor under the control of CG or SG are exempted from theoperations of sec.4A.
  • 10.  Every employee, who has completed 1 yr of service , is compulsorily required to make a nomination (Form F) The nomination must be made within 30 days
  • 11. The nomination must be made in favor of one ormore members of the family(nomination shall be voidif it is made in favor of a person who is not a memberof his family)If at the time of making nomination, the employeedoes not have family, the nomination may be made infavor of any personThe employee may distribute the amount of gratuityamongst more than one nominee
  • 12.  Application can be made by :- • An employee who is eligible for payment of gratuity • Any person authorized in writing by such employee • Nominee of the employee(if the deceased employee had made a nomination) • Legal heir of the employee(if the deceased employee had not made any nomination)
  • 13.  If the employer fails to pay the gratuity within the prescribed time (i.e., within 30 days of termination of employment) , the controlling authority is empowered to issue a certificate to the collector to recover the amount of Gratuity The employer shall also be liable to pay Compound interestat such rate as may be notified by CG from time to time The interest shall be paid from the date of expiry of the prescribedperiod& ending with actual date of payment of Gratuity The interest payable shall not exceed the amount of gratuitypayable
  • 14. OFFENCE PENALTYFalse statement to 6 months imprisonment oravoid payment Rs 10,000 or both 3 months-1 yrDefault in complying imprisonment or Rs 20,000with Act or bothNon-payment of 6 months-2 yrsGratuity imprisonment
  • 15.  Monthly Rated Employee Piece rated employee Employee of a Seasonal Establishment
  • 16. • Last drawn wages x 15/26 x Completed years of Service(incl. a part of year in excess of 6 months) NOTE:• Wages = Last drawn• Month = Period of 26 Days• 15 days wages = Last drawn wages x 15/26
  • 17. • Last drawn wages x 15/26 x Completed years of Service(incl. a part of year in excess of 6 months)NOTE:• Last drawn wages = Total wages received during 3 monthsimmediately preceding termination/Days actually worked• Last drawn wages shall not include overtime wages
  • 18. • Such an employee shall be paid gratuity at therate of 7 days wages for each season