53651751 ppt payment of gratuity act 1972 2

8/12/2019 53651751 PPT Payment of Gratuity Act 1972 2

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THE PAYMENT OF

GRATUITY ACT,1972

PRESENTATION BYSHANKARNAG


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INTRODUCTION

Gratuity means gifts or service often inreturn of favors and services.

In the present context, it means, a sum of

money paid to an employee at the end of

employment.

Gratuity in case of retirement,

superannuation or death helps family to

adjust in a new situation in which incomeceases partially or completely.

Gratuity Schemes, serves as an important

tool of social security.


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TO WHAT SHALL THE ACT

APPLY TO

Every factory, mine, oilfield, plantation,

port and railway company.

Every Shop or establishment if it employs

10 or more person in preceding one year.

Such other establishment in which 10 or

more employees are employed or were

employed on any day of preceding twelve

months.


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Payment of Gratuity

Gratuity shall be payable to an employee on thetermination of his employment after he has renderedcontinuous service for not less than five years, -

(a) on his superannuation, or

(b) on his retirement or resignation, or

(c) on his death or disablement due to accident ordisease : Provided that the completion ofcontinuous service of five years shall not benecessary where the termination of theemployment of any employee is due to death ordisablement .


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Payment Of Gratuity

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 thecontrolling authority who shall invest the same for thebenefit of such minor in such bank or other financialinstitution, as may be prescribed, until such minorattains majority.


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Payment of Gratuity

For every completed year of service or part thereof inexcess of six months, the employer shall pay gratuity toan employee at the rate of fifteen days' wages based onthe rate of wages last drawn by the employee

concerned.

Provided that in the case of a piece-rated employee,daily wages shall be computed on the average of thetotal wages received by him for a period of three monthsimmediately preceding the termination of hisemployment, and, for this purpose, the wages paid forany overtime work shall not be taken into account.


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CALCULATING FORMULA

Provided further that in the case of an employee

who is employed in a seasonal establishment

and who is not so employed throughout the

year, the employer shall pay the gratuity at the

rate of seven days' wages for each season.

FIFTEEN DAYS WAGE=

(MONTHLY RATE OF WAGES LAST DRAWN BY HIM / 26) *

15


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Payment of Gratuity

Gratuity Amount payable under Payment of Gratuity

Act enhanced from Rs.3.5 lakhs to Rs. 10 lakhs

As Per

Payment of Gratuity (Amendment) Act,2010 (No. 15 of

2010), dated 17-5-2010

Section 4 (4) now reads as

The amount of gratuity payable to an employee shall

not exceed Ten Lakh Rupees


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Payment Of Gratuity

For the purpose of computing the 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 the wages received by

him during that period, and his wages for the periodsubsequent to his disablement shall be taken to be the

wages as so reduced.

Nothing in this section shall affect the right of anemployee to receive better terms of gratuity under any

award or agreement or contract with the employer.


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Payment Of Gratuity

Notwithstanding anything contained in

sub-section (1), - (a) the gratuity of an

employee, whose services have been

terminated for any act, willful omission ornegligence causing any damage or loss to,

or destruction of, property belonging to the

employer, shall be forfeited to the extent ofthe damage or loss so caused.


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Payment of Gratuity

The gratuity payable to an employee may be

wholly or partially forfeited

if the services of such employee have been

terminated for his riotous or disorderly conduct orany other act of violence on his part, or

if the services of such employee have been

terminated for any act which constitutes an offenceinvolving moral turpitude, provided that such

offence is committed by him in the course of his

employment.


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INSPECTORS

The appropriate Government may, by notification,appoint as many Inspectors, as it deems fit, for thepurposes of this Act.

The appropriate Government may, by general or specialorder, define the area to which the authority of anInspector so appointed shall extend and where two ormore Inspectors are appointed for the same area, alsoprovide, by such order, for the distribution or allocation of

work to be performed by them under this Act.

Every Inspector shall be deemed to be a public servantwithin the meaning of section 21 of the IPC, 1860 (45 of

1860).

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POWER OF INSPECTORS

Require an employer to furnish such

information as he may consider

necessary. Enter and inspect.

Examine .

Exercise such other powers as may

be prescribed.


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RECOVERY OF GRATUITY

If the amount of gratuity payable is not paid by theemployer, within the prescribed time, to the person entitledthereto, the controlling authority shall, on an applicationmade to it in this behalf by the aggrieved person, issue acertificate for that amount to the Collector, who shall

recover the same, together with compound interest thereonat such rate as the Central Government may, bynotification, specify, from the date of expiry of theprescribed time, as arrears of land revenue and pay thesame to the person entitled thereto :Provided that the

controlling authority shall, before issuing a certificate underthis section, give the employer a reasonable opportunity ofshowing cause against the issue of such certificate:Provided further that the amount of interest payable underthis section shall, in no case exceed the amount of gratuity

payable under this Act.


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EXEMPTION OF EMPLOYER FROM

LIABILITY IN CERTAIN CASES

Where an employer is charged with an offencepunishable under this Act, he shall be entitled,upon complaint duly made by him and on givingto the complainant not less than three clear

days' notice in writing of his intention to do so, tohave any other person whom he charges as theactual offender brought before the court at thetime appointed for hearing the charge; and if,after the commission of the offence has been

proved, the employer proves to the satisfactionof the court (a) that he has used due diligence to enforce the

execution of this Act, and


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Cont

(b) that the said other person committed

the offence in question without his

knowledge, consent or connivance, that

other person shall be convicted of theoffence and shall be liable to the like

punishment as if he were the employer

and the employer shall be discharged fromany liability under this Act in respect of

such offence :


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PROTECTION OF GRATUITY

No gratuity payable under this Act and no

gratuity payable to an employee employed

in any establishment, factory, mine,

oilfield, plantation, port, railway companyor shop exempted under section 5 shall be

liable to attachment in execution of any

decree or order of any civil, revenue orcriminal court.


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CASE

Dena bank vs. Manjulaben M. Thakor(smt)

& Anr.(2012 LLR 648)

Forum: Kerala High Court


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JUDGEMENT

The contention of the petitioner-bank was

that the deceased workman had

committed an act involving moral turpitude

& therefore was not entitled to the gratuityamt under sec (6)(b)(ii) of the gratuity Act

read with the plaintiff's Banks Service

regulations.


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Cont

The court, after perusal of the dismissal order by

the bank, observed that there was no direction in

the dismissal order for forfeiture of the gratuity

amt, which the deceased workman wasotherwise entitled to, it being a statutory right.

The charge sheet had not stated forfeiture of

gratuity on the ground of moral turpitude & no

inquiry had been conducted on that count. Also,the petitioner-bank had admittedly not initiated

any penal action with a view to forfeit the gratuity

amount.


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Cont

Thus, in the absence of a proper order by

the employer, the Court held the forfeiture

of gratuity of the employee to be not

sustainable.


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THANK YOU

53651751 ppt payment of gratuity act 1972 2

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