Payment Of Gratuity Act, 1972
Every factory, mine, oil field, plantation, port, railways, company, shop, establishment or educational institutions employing 10 or more persons, Sec - 1
All employees Irrespective of status or salary shall be covered under this Act.
Gratuity shall be payable to an employee on separation from employment due to any of the following reasons, after he has rendered continuous service* for not less than five years:
- (a) on his superannuation, or
- (b) on his retirement / registration, or
- (c) on his death or disablement due to accident or disease
*Continuous Service means, that the employee shall be deemed to be in continuous service even under the following circunstances:
To be obtained by employer after expiry of one year's service, in Form 'F'. Sec.6, Rule 6
Method Of Calculation
General Calculation: Last drawn Basic (or Wages) [/] 26[x]15[x] Service Length, where:
Piece Rate Based Calculation: @15 days' wages for every completed year on an average of 3 months' wages.
Seasonal Based Calculation: @7 days' wages for every completed year of service.
Payment of Gratuity not to exceed Rs.10,00,000. Sec-4(3)
Mode of Payment
Cash or, if so desired, by beneficiary, by Bank Draft or Cheque. Rule-9
Display of Notice
On conspicuous place at the main entrance in English language or the language understood by majority of employees of factory, etc Rule-4
Protection of Gratuity
Can not be attached in execution of any decree. Sec-13
Recovery of Gratuity
Cancerned employee / beneficiary to apply within 30 days in Form-I when not paid by the employer within 30 days
As per the provisions of the Act, Gratuity of an employee can be forfeited, if his services have been terminated for any act, willfull omission or negligence causing any damage or loss to, or destruvtion of, property belonging to the Company to the extent of damage or loss so caused.
Imprisonment for 6 months or fine upto Rs.10,000 for avoiding to make payment by making false statement or representation
Imprisonment not less than 3 months and upto one year with fine on default in complying with the provisions of Act or Rules.