Gratuity Act
Payment of Gratuity
The Payment of Gratuity Act 1972 is a social security enactment. It is derived from the word ‘gratuitous’, which means ‘gift’ or ‘present’. However, having being enacted as a social security form, it ceases to retain the concept of a gift but it has to be seen as a social obligation by an employer towards his employee.
Applicability
The Payment of Gratuity Act 1972 applies to the whole of India but it does not apply to the State of Jammu and Kashmir. It applies to employees employed in:
(a) Every factory, mine, oilfield, plantation, port and Railway Company.
(b) Every shop or establishment in which 10 or more persons are or were employed on any day in the preceding 12 months.
(c) Such other establishments or class of establishment, in which 10 or more employees are or were employed on any day in the preceding 12 months, as the Central Government may notify in this behalf.
Any shop or establishment shall continue to be governed by the Act even if the no. of its employees comes below 10 persons at any time in the future.
Applicability to NGOs
Public charitable and religious trusts are also covered by this Act, provided that they are shops or establishments within the meaning of the Shops and Establishment Act applicable to their area of operation and that 10 or persons have been employed by them on any day in the preceding 12 months.
Definitions
1. Continuous Service:
For the purposes of this Act, -
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, 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. (a) for the said period of one year, if the employee during the period of
The Payment of Gratuity Act 1972 is a social security enactment. It is derived from the word ‘gratuitous’, which means ‘gift’ or ‘present’. However, having being enacted as a social security form, it ceases to retain the concept of a gift but it has to be seen as a social obligation by an employer towards his employee.
Applicability
The Payment of Gratuity Act 1972 applies to the whole of India but it does not apply to the State of Jammu and Kashmir. It applies to employees employed in:
(a) Every factory, mine, oilfield, plantation, port and Railway Company.
(b) Every shop or establishment in which 10 or more persons are or were employed on any day in the preceding 12 months.
(c) Such other establishments or class of establishment, in which 10 or more employees are or were employed on any day in the preceding 12 months, as the Central Government may notify in this behalf.
Any shop or establishment shall continue to be governed by the Act even if the no. of its employees comes below 10 persons at any time in the future.
Applicability to NGOs
Public charitable and religious trusts are also covered by this Act, provided that they are shops or establishments within the meaning of the Shops and Establishment Act applicable to their area of operation and that 10 or persons have been employed by them on any day in the preceding 12 months.
Definitions
1. Continuous Service:
For the purposes of this Act, -
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, 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. (a) for the said period of one year, if the employee during the period of