Payment of Gratuity Act
Payment of Gratuity Act, 1972
Outline
• • Applicability of the Act (Sec 1) & Definitions (Sec 2) – employee, superannuation, continuous service (Sec 2(A)), Wages Payment of gratuity (Sec 4) o Continuous service of not less than 5 yrs o Calculation of gratuity in case of seasonal employees, in case of employee employed after disablement, on ‘retrenchment’, for service beyond the age of superannuation, on resignation o Calculation of “15 days” wages in respect of mthly rated employee, piece-rated employee, daily wager for 26 days in a month o Entitlement to gratuity with better terms o Withholding & forfeiture of gratuity Power to exempt (Sec 5) – payment of gratuity vis-à-vis curtailment of benefits by management Determination of the amt. of gratuity (Sec 7) o Duty of an employer to determine gratuity amt. o Mode of payment of gratuity & pd. of limitation to Controlling authority o Rate of interest Recovery of gratuity (Sec 8) o Delay in payment of gratuity – effect o Default in payment of gratuity or wages on part of employer Act to override other enactments (Sec 14)
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1
Wages
Sec 2(s) – B+DA + incentive wages * + Food Allowance (In case it is paid to Hotel Employees). Nomenclature of ‘honorarium’ to the remuneration for the services rendered by a person where employed for work. Not a part of wages under the Act, 1972 (bonus, commission, HRA, OT, & any other allowance like ‘teller’s allowance’ not even if it is vide bipartite settlements) * Bonus & incentive bonus paid separately – Bonus would include incentive wages (Not even in case of a piece rated employees)
Continuous Service
Read Sec 2(A) – in case of interruption of service due to illegal strike, the burden of proof lies upon the person who claims benefit under all circumstance. Where orders of Controlling / Appellate Authority put the onus on employee – HC held the normal rule by asking both the parties to lead evidence on the said issue.
Other Issues
Employee – if
Outline
• • Applicability of the Act (Sec 1) & Definitions (Sec 2) – employee, superannuation, continuous service (Sec 2(A)), Wages Payment of gratuity (Sec 4) o Continuous service of not less than 5 yrs o Calculation of gratuity in case of seasonal employees, in case of employee employed after disablement, on ‘retrenchment’, for service beyond the age of superannuation, on resignation o Calculation of “15 days” wages in respect of mthly rated employee, piece-rated employee, daily wager for 26 days in a month o Entitlement to gratuity with better terms o Withholding & forfeiture of gratuity Power to exempt (Sec 5) – payment of gratuity vis-à-vis curtailment of benefits by management Determination of the amt. of gratuity (Sec 7) o Duty of an employer to determine gratuity amt. o Mode of payment of gratuity & pd. of limitation to Controlling authority o Rate of interest Recovery of gratuity (Sec 8) o Delay in payment of gratuity – effect o Default in payment of gratuity or wages on part of employer Act to override other enactments (Sec 14)
• •
•
•
1
Wages
Sec 2(s) – B+DA + incentive wages * + Food Allowance (In case it is paid to Hotel Employees). Nomenclature of ‘honorarium’ to the remuneration for the services rendered by a person where employed for work. Not a part of wages under the Act, 1972 (bonus, commission, HRA, OT, & any other allowance like ‘teller’s allowance’ not even if it is vide bipartite settlements) * Bonus & incentive bonus paid separately – Bonus would include incentive wages (Not even in case of a piece rated employees)
Continuous Service
Read Sec 2(A) – in case of interruption of service due to illegal strike, the burden of proof lies upon the person who claims benefit under all circumstance. Where orders of Controlling / Appellate Authority put the onus on employee – HC held the normal rule by asking both the parties to lead evidence on the said issue.
Other Issues
Employee – if