gratuity act (vikram)
TRANSCRIPT
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Payment Of Gratuity Act, 1972
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GratuityA kind of retirement benefit.
It is a payment that is intended to help an employeeafter his retirement.
General principle - for faithful service over a longperiod the employee is entitled to claim a certain
amount as retirement benefit.Earned by an employee for long & meritorious
service.
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Definitions: section-2
S.2 (e) "employee" means any person employed to do any
skilled, semi-skilled, or unskilled, manual, supervisory,
technical or clerical work
it does not include an apprentice
S.2 (s) "wages" includes dearness allowance but does not
include any bonus, commission, house rent allowance,overtime wages and any other allowance.
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Enactment ofPayment of Gratuity Act {1972
}Proposal for enactment was discussed in:
Labour Ministers Conference {Aug 24 & 25} Indian Labour Conference {Oct 22 & 23}
A bill was passed as the Payment Of Gratuity Act1972.
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Scope And Coverage The Act applies to the whole of India.
The Act applies to:
Every mine , factory, oilfield, plantation, port &
railway company.
Every shop or establishment in which 10 or more
persons are employed.
The Act does not apply to:
Persons who hold civil Posts under the Central
Government or State Government.
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Payment of GratuityPayment of Gratuity
It is a payment that is intended to help an
employee after his retirement whether the retirementis due to super-annuation or due to some physical
disability.
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How to calculate the Amount of Gratuity
Monthly rated employee :
At the rate of 15 days wages based on the rate of wages last drawn by theemployee concerned:
Formula: last drawn wages * 15 days * No. of completed year of service
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piece-rated employee, daily wages :
On the average of the total wages received by him for a period of three monthsimmediately preceding the termination of his employment excluding overtimewages
seasonal establishment
At the rate of seven days wages for each season.
Maximum Limit Rs.3,50,000/-
Higher benefits can be paid if the employer so desires.
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1. Gratuity should be paid to an employee on the
termination of his employment after he has renderedservice for not less than 5 yrs -
on his super-annuation
his retirement
his resignation
on his death or disablement due to disease or accident
Payment of GratuityPayment of Gratuity
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Condition:-
Completion of continuous services of five years is notnecessary when the termination of employee is due todeath of disablement.
In case of death of employee gratuity payable to him is
paid to his nominee.2. For every completed year of service or part, the employer
shall pay gratuity to the employee at the rate of fifteen
days wages based on the rate of the wags last drawn by
the employee concerned.
Payment of GratuityPayment of Gratuity
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Payment of GratuityPayment of Gratuity
3. The amount of gratuity payable to an employee
shall not exceed three lakhs and fifty thousandrupees.
4. Nothing in this section shall affect the right of
an employee to receive better terms of gratuityunder any award or agreement or contract with
the employer.
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NominationNomination1. If an employee has a family at the time of making
a nomination, the nomination shall be made infavor of one or more member of his family .
2. If any nomination is made by an employee in favor
of a person who is not the member of his family,
shall be void.
3. If an employee has no family at the time of
making a nomination, the nomination shall be
made in favor of any person or persons
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4. If the employee acquires a family after making anomination then such nomination become invalid,
and a fresh nomination is made in favor of a family
member.
5. Every nomination , fresh nomination or
alternation of nomination shall be sent by the
employee to his employer, who shall keep it in his
safe custody.
NominationNomination
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Determination of the Amount ofGratuity (Sec.7)
Application for gratuity[sec7(1)]:
An employee who is eligible for payment of gratuity can give an application in writing tothe employer within 30 days from the date thegratuity becomes payable.
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Determination of the Amount of
Gratuity (Sec.7)
Determination of gratuity [Sec7(2)]:
Employer determine the amount of the gratuityand give notice to controlling authority and theemployee.
Payment of gratuity[sec7(3)]:
Employer pay the amount of gratuity to the employee.
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Determination of the Amount of
Gratuity (Sec.7)
Payment of interest[sec7(3A)]:
Interest is paid if the amount of gratuity is not paid within a period of 30 days at the rate notifiedby central government.
Dispute as to Gratuity[sec7(4)]:
If disputes arises regarding the amount of the gratuity and the claim taken by nominee the employer deposit the amount to the controlling
authority, and he solve the dispute.
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Inspectors(Sec.7A)
Appointed by the Government for the purpose of
this act. Two or more inspector can be appoint for the same
area.
Every Inspector shall be deemed to be a publicservant within the meaning of section 21, of the
Indian Penal Code, 1860.
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Powers of the Inspectors(Sec 7B)
Ask for any information from the employer. Examining any register, record or notice or other
documents.
Search and seize register, record, notice or otherdocument in respect of offence;
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Recovery of Gratuity(Sec 8)
Controlling authority issued certificate to the
collector on behalf of aggrieved party. Collector recover the amount together with
compound interest.
Amount of interest should not exceed the amount ofgratuity.
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(1) Whoever, for the purpose of avoiding any payment to be
made by himself under this Act or of enabling any other
person to avoid such payment, knowingly makes or causes to
be made any false statement or false representation shall be
punishable with imprisonment for a term which may extend
to six months, or with fine which may extend to ten thousand
rupees or with both.
Penalties
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Penalties2)An employer who contravenes, or makes default in
complying with, any of the provisions of this Act orany rule or order made there under shall be punishable
with imprisonment for a term which shall not be less
than three months but which may extend to one year,or with fine which shall not be less than ten thousand
rupees but which may extend to twenty thousand
rupees, or with both
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Can Gratuity be withheld by the employer ?
The gratuity of an employee, whose services have been terminated for any act, willful omission or negligence causing anydamage or loss to, or destruction of, property belonging to the
employer, shall be forfeited to the extent of the damage or loss socaused.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 or any other act of violence on hispart, orIf the services of such employee have been terminated for any actwhich constitutes an offence involving moral turpitude, providedthat such offence is committed by him in the course of his employment.
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Protection Of Gratuity No gratuity payable under this Act and no gratuity
payable to an employee employed in anyestablishment, factory, mine, oilfield, plantation,
port, railway company or shop exempted under
section shall be liable to attach-ment in execution of
any decree or order of any civil, revenue or criminal
court.
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Thank you