Payment of gratuity act 1972 notes

By Prachi Agrawal, CNLU Editor’s Note:Gratuity is a voluntary Payment made by the employer to the employee in recognition of continuous, meritorious services and sincere efforts by the employee towards the organization. It is governed under the Payment of Gratuity Act 1972. It is an Act to provide for a scheme for the payment of gratuity to employees engaged in factories, mines, Oilfields, plantations, ports, railway companies, and shops or other establishments. This Paper attempts to highlight the various critical issues pertaining to this Act along with its applicability and efficacy. Introduction The Payment of Gratuity Act 1972 is a social security enactment. An Act to provide for a scheme for the payment of gratuity to employees engaged in factories, mines, oilfields, plantations, ports, Railway companies, shops or other establishments[i]. The significance of this legislation lies in the acceptance of the principle of gratuity as a compulsory statutory retiral benefit.[ii] The Act accepts, in principle, compulsory payment of gratuity as a social security measure to the wage-earning population in industries, factories and establishments. Thus, the main purpose and concept of gratuity are to help the workman after retirement, whether retirement is a result of the rules of superannuation or physical disablement or impairment of vital part of the body. Thus, it is a sort of financial assistance to tide over post retiral hardships and inconveniences.[iii] It is derived fro...

Recovery of Gratuity : Section 8 provides that if the amount of gratuity payable under this Act is not paid by the employer within the prescribed time, the claimant shall make an application to the Controlling Authority. The Controlling Authority is authorized to issue a certificate to the Collector to recover the amount.Recovery of Gratuity. Section 8 provides that if the amount of gratuity payable under this Act is not paid by the employer within the prescribed time, the claimant shall make an application to the Controlling Authority. The Controlling Authority is authorized to issue a certificate to the Collector to recover the amount. The Collector shall recover the amount together with compound interest thereon at such as the Central Government may specify, from the date of expiry of the prescribed time.The amount of interest payable under :this section shall not exceed the amount of gratuity payable under this Act., The amount of gratuity under this section shall be recovered as arrears of land revenue and paid to. the person entitled thereto.The Controlling Authority, before issuing a certificate to the Collector, shall give the employer a reasonable opportunity of showing cause against the issue of such certificate. Penalties : The Payment of Gratuity Act, 1972 imposes penalties on employers for various offences. These are stated below. Making a false statement or false representation to avoid any payment under the Act. Imprisonment for a term which up-to 6 months o...

Page 1 5 The Payment of Gratuity Act, 1972 Learning Objectives In this Chapter, the students come to know ? To whom Gratuity is payable? ? How to calculate the amount of Gratuity payable? ? When Gratuity will be forfeited? ? Procedure for nomination in respect of Gratuity payment. 5.1 An Introduction Gratuity is a word derived from a Latin word ‘Gratuitas’ which simply means a ‘Gift.’ In the industrial sector, it can be treated as a gift from the employer to his employee for the services rendered to his establishment by him for the development and prosperity of the same. Gratuity is a benefit, which an employee gets at the time of retirement or when he leaves the establishment. Gratuity is a amount (as a lump sum payment) which is paid by an employer to his employee for his past services when the employment comes to an end due to the retirement or superannuation of the workers. Thus, this gratuity scheme serves as an instrument of social security as well as a reward to a person who sacrifices his whole life in the betterment, development and prosperity of an establishment, and in other way for the Nation. Today the payment of gratuity have become a statutory obligation of employers and a statutory right of the employees to claim through the way of an enactment, the Payment of Gratuity Act,1972. The Act provide for a scheme for the payment of gratuity to employees engaged in factories, mines, oilfields, plantations, ports, railway companies, shops or other establishments an...

By Prachi Agrawal, CNLU Editor’s Note:Gratuity is a voluntary Payment made by the employer to the employee in recognition of continuous, meritorious services and sincere efforts by the employee towards the organization. It is governed under the Payment of Gratuity Act 1972. It is an Act to provide for a scheme for the payment of gratuity to employees engaged in factories, mines, Oilfields, plantations, ports, railway companies, and shops or other establishments. This Paper attempts to highlight the various critical issues pertaining to this Act along with its applicability and efficacy. Introduction The Payment of Gratuity Act 1972 is a social security enactment. An Act to provide for a scheme for the payment of gratuity to employees engaged in factories, mines, oilfields, plantations, ports, Railway companies, shops or other establishments[i]. The significance of this legislation lies in the acceptance of the principle of gratuity as a compulsory statutory retiral benefit.[ii] The Act accepts, in principle, compulsory payment of gratuity as a social security measure to the wage-earning population in industries, factories and establishments. Thus, the main purpose and concept of gratuity are to help the workman after retirement, whether retirement is a result of the rules of superannuation or physical disablement or impairment of vital part of the body. Thus, it is a sort of financial assistance to tide over post retiral hardships and inconveniences.[iii] It is derived fro...

Page 1 5 The Payment of Gratuity Act, 1972 Learning Objectives In this Chapter, the students come to know ? To whom Gratuity is payable? ? How to calculate the amount of Gratuity payable? ? When Gratuity will be forfeited? ? Procedure for nomination in respect of Gratuity payment. 5.1 An Introduction Gratuity is a word derived from a Latin word ‘Gratuitas’ which simply means a ‘Gift.’ In the industrial sector, it can be treated as a gift from the employer to his employee for the services rendered to his establishment by him for the development and prosperity of the same. Gratuity is a benefit, which an employee gets at the time of retirement or when he leaves the establishment. Gratuity is a amount (as a lump sum payment) which is paid by an employer to his employee for his past services when the employment comes to an end due to the retirement or superannuation of the workers. Thus, this gratuity scheme serves as an instrument of social security as well as a reward to a person who sacrifices his whole life in the betterment, development and prosperity of an establishment, and in other way for the Nation. Today the payment of gratuity have become a statutory obligation of employers and a statutory right of the employees to claim through the way of an enactment, the Payment of Gratuity Act,1972. The Act provide for a scheme for the payment of gratuity to employees engaged in factories, mines, oilfields, plantations, ports, railway companies, shops or other establishments an...

Recovery of Gratuity : Section 8 provides that if the amount of gratuity payable under this Act is not paid by the employer within the prescribed time, the claimant shall make an application to the Controlling Authority. The Controlling Authority is authorized to issue a certificate to the Collector to recover the amount.Recovery of Gratuity. Section 8 provides that if the amount of gratuity payable under this Act is not paid by the employer within the prescribed time, the claimant shall make an application to the Controlling Authority. The Controlling Authority is authorized to issue a certificate to the Collector to recover the amount. The Collector shall recover the amount together with compound interest thereon at such as the Central Government may specify, from the date of expiry of the prescribed time.The amount of interest payable under :this section shall not exceed the amount of gratuity payable under this Act., The amount of gratuity under this section shall be recovered as arrears of land revenue and paid to. the person entitled thereto.The Controlling Authority, before issuing a certificate to the Collector, shall give the employer a reasonable opportunity of showing cause against the issue of such certificate. Penalties : The Payment of Gratuity Act, 1972 imposes penalties on employers for various offences. These are stated below. Making a false statement or false representation to avoid any payment under the Act. Imprisonment for a term which up-to 6 months o...