Académique Documents
Professionnel Documents
Culture Documents
1972
Gratuity
A kind of retirement benefit.
It is a payment that is intended to help an
employee after his retirement.
General principle - for faithful service over a
long period the employee is entitled to claim
a certain amount as retirement benefit.
Earned by an employee for long &
meritorious service.
Definitions: section-2
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.
Payment of Gratuity
1. Gratuity should be paid to an employee on
the termination of his employment after he
has rendered service 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 Gratuity
Condition:-
Completion of continuous services of five years is not
necessary when the termination of employee is due to
death 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 Gratuity
3. The amount of gratuity payable to an
employee shall not exceed three lakhs and
fifty thousand rupees.
4. Nothing in this section shall affect the
right of an employee to receive better terms
of gratuity under any award or agreement or
contract with the employer.
Nomination
1. If an employee has a family at the time of making
a nomination, the nomination shall be made in
favor 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
Nomination
4. If the employee acquires a family after
making a nomination 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.
Determination of the Amount of
Gratuity (Sec.7)
•Application for gratuity[sec7(1)]:
An employee who is eligible for payment
of gratuity can give an application in
writing to the employer within 30 days
from the date the gratuity becomes
payable.
.
Determination of the
Amount of Gratuity (Sec.7)
Determination of gratuity [Sec7(2)]:
Employer determine the amount of the gratuity and
give notice to controlling authority and the employee.
Payment of gratuity[sec7(3)]:
Employer pay the amount of gratuity to the
employee.
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 notified by
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.
Inspectors(Sec.7A)