Gratuity is a statutory benefit paid to the employees who have rendered continuous service for at least five years. It is a lump sum amount paid to an employee based on the duration of his total service. The benefit gratuity is payable to an employee on cessation of employment (either by resignation, death, retirement or termination, etc) by taking the last drawn salary as the basis for the calculation. Gratuity is an important form of social security and is in the form of a gratitude provided by the employer to the employees in monetary terms for the services rendered by them to the organization. It is a defined benefit plan and is one of the many retirement benefits offered by the employer to the employee upon leaving his job. Gratuity payment liability of the employer tends to increase with an increase in the salary and tenure of employment. more info visit https://motiveap.blogspot.com/2019/08/gratuity-rules-applicability-payment.html

1. GRATUITY ACT
Presented By
Aparna chourasia
Roll No. : Y152820113
Department of Business Management
Dr. H.S.Gour Vishwvidyalaya (A Central
University) Sagar (M.P.)

2. GRATUITY
• Gratuity is a statutory benefit paid to
the employees who have rendered
continuous service for at least 5
years.
• It is a lump sum amount paid to an
employee based on the duration of
his total service

3. Application Of The Act
Depends on two factor
• Firstly he should be employed in an
establishment to which Act applied according to
sec1(3)
(a) Every factory, mine, oilfield, plantation, port,
railway company
(b) Every establishment within the meaning of
any law, force in relation to shops and
establishments in a State, in which 10 or more
persons are employed, or were employed, on
any day of the preceding 12 months;

4. (c) as per the notification of Central Government in this
behalf.
Secondly he should be employee under Section 2(e)
Employee means any person (other than an apprentice)
employed on wages in an establishment to do any
skilled, semiskilled, unskilled, manual or supervisory,
technical, or clerical work.

5. When Is Gratuity Payable
• According to section 4(1) of the Payment of
Gratuity Act, 1972 gratuity is paid after
termination of employee after rendering
continuous service not less then 5 years:
(a) on his superannuation,
(b) on his retirement or resignation or,
(c) on his death or disablement due to accident or
disease.

6. Who should get if employee dies
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 (i.e. government officer) 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.

7. Amount Of Gratuity Payable
• Basic pay is divided by 26. The amount so
obtained is multiplied by 15 to compute the
amount of gratuity per year.
• Maximum Gratuity Payable under Act was Rs.
10,00,000/-
• Now maximum Gratuity Payable under Act
was Rs.20,00,000/- ( w.e.f. 29 March 2018)

8. Time Limit For Payment Of
Gratuity
• The employer shall arrange to pay the amount
of gratuity within thirty days from the date it
becomes payable
• If not paid within the period stipulated above
employer is liable to pay interest for the
delayed payment
• Interest is not payable if the delay was caused
due to the fault of the employee and

9. • the employer has obtained permission in
writing from the controlling authority for the
delayed payment on this ground
• If there is any dispute as to the amount payable
or the persons eligible to receive it
• the employer shall deposit amount as per his
calculation with the controlling authority.

10. Procedure For Resolving The
Disputes
Where there is a dispute the aggrieved party shall
make an application to the controlling authority for
deciding the dispute.
Controlling authority shall, after due inquiry and after
giving the parties to the dispute a reasonable
opportunity of being heard, determine the matter and
pass appropriate orders

11. Powers Of Controlling Authority
The controlling authority shall have the powers in
respect of the following matters, namely
(a) Enforcing the attendance of any person
(b) Requiring the discovery and production of
documents
(c) Receiving evidence on affidavits;
(d)Issuing commissions for the examination of
witnesses.

12. Appeal Against The Order Of
Controlling Authority
Appeal if any shall be made within 60 days from the
date of the order
Appeal by employer will not be admitted unless the
disputed amount is deposited
Appellate authority, after giving the parties to the
appeal a reasonable opportunity of being heard,
Confirm, modify or reverse the decision of the
controlling authority

13. Penalities
• Non Payment Of Gratuity
Imprisoment: 6months -2 years
Fine : 10,000 to 20,000rs or both
• Fail In Compulsory Insurance
Fine : 10,000rs
For Continuous Offence : 1000rs/Day