Professional Documents
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The Act provides a scheme to ensure uniform pattern for the payment of
gratuity to employees throughout the country in order to avoid different
treatment to the employees of establishments having branches in more than
one State when, under the conditions of the service, the employees are liable
to transfer from one State to another. For details the original Act may please
be referred.
(b) every shop or establishment within the meaning of any law for
the time being in force in relation to shops and establishments
in a State, in which ten or more persons are employed, or
were employed, on any day of the preceding twelve months;
Sec 2 Definitions :
(a) for the said period one year, if the employee during the
period of twelve calendar months preceding the date with
reference to which calculation is to be made, has actually worked
under the employer for not less than—
(b) for the said period of six months, if the employee during
the period of six calendar months preceding the date with
Vol - IV / CHAPTER-X 62
(ii) he has been on leave with full wages, earned in the previous year;
(iv) in the case of a female, she has been on maternity leave; so,
however, that the total period of such maternity leave does not
exceed twelve weeks.
Provided that the completion of continuous service of five years shall not
be necessary where the termination of the employment of any employee is due
to death or disablement:
(2) For every completed year of service or part thereof in excess of six
months, the employer shall pay gratuity to an employee at the rate of fifteen
days’ wages based on the rate of wages last drawn by the employee
concerned:
(3) The amount of gratuity payable to an employee shall not exceed three
lakhs and fifty thousand rupees.
Vol - IV / CHAPTER-X 64
(4) 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 as so reduced.
(3) The employer shall arrange to pay the amount of gratuity within thirty days
from the date it becomes payable to the person to whom the gratuity is
payable.
(3A) If the amount of gratuity payable under sub-section (3) is not paid by the
employer within the period specified in sub-section (3), the employer shall pay,
from the date on which the gratuity becomes payable to the date on which it is
paid, simple interest at such rate, not exceeding the rate notified by the Central
Government from time to time for repayment of long-term deposits, as that
Government may, by notification specify:
(b) Where there is a dispute with regard to any matter or matters specified in
Clause(a), the employer or employee or any other person raising the dispute
may make an application to the controlling authority for deciding the dispute.
(c) The controlling authority shall, after due inquiry and after giving the parties
to the dispute a reasonable opportunity of being heard, determine the matter or
matters in dispute and if, as a result of such inquiry any amount is found to be
payable to the employee, the controlling authority shall direct the employer to
pay such amount or, as the case may be, such amount as reduced by the
amount already deposited by the employer.
(d) The controlling authority shall pay the amount deposited, including the
excess amount, deposited by the employer, to the person entitled thereto.
(e) As soon as may be after a deposit is made under clause (a), the
controlling authority shall pay the amount of the deposit—
(5) For the purpose of conducting an inquiry under sub-section (4), the
controlling authority shall have the same powers as are vested in a court, while
trying a suit, under the Code of Civil Procedure, 1908 (5 of 1908), in respect of
the following matters, namely:--
(6) Any inquiry under this section shall be a judicial proceeding within the
meaning of Sections 193 and 228, and for the purpose of Section 196, of the
Indian Penal Code (45 of 1860).
Vol- IV / CHAPTER-X 67
(7) Any person aggrieved by an order under sub-section (4) may, within sixty
days from the date of the receipt of the order, prefer an appeal to the
appropriate Government or such other authority as may be specified by the
appropriate Government in this behalf.
Provided further that the amount of interest payable under this section
shall, in no case exceed the amount of gratuity payable under this Act.
(7)
Vol- IV / CHAPTER-X 69
2. These Rules shall apply to all the employees of the Company including
Chief Executive and full time Functional Directors excluding the following
categories of employees:-
(a) Employees entitled to gratuity under the Payment of Gratuity Act, 1972
as amended from time to time.
(b) “Completed year of service” means continuous service for one year. An
employee shall be deemed to be in continuous service if he was actually
employed during 12 months preceeding the year for not less than 240
days.
Vol - IV / CHAPTER-X 70
(c) “Emoluments” means, the monthly basic pay, special pay plus dearness
allowance last drawn by the employee.
4.1 Gratuity will be payable to all employees who have rendered not less
than five years continuous service in the Company and whose service ceases
in the following circumstances:
(a) Superannuation;
(ii) In the case of death of the employee, gratuity payable to him shall
be paid to his nominee or if no nomination is made to his legal
heir or heirs;
(v) Any amount due by the employee to the Company or any loss or
damage caused by him to the Company will be recoverable from
gratuity;
Note: (a) Gratuity amount for the period of service rendered to the
company will be transferred to the new organisation even though an
employee has not rendered 5 years of service in BDL;
(b) Before the gratuity of an ex-employee is transferred to another
organisation, an undertaking shall be obtained from that organisation
to the effect that in the event of the concerned employee leaving the
service before he becomes eligible for payment of gratuity under their
rules by joining a private organisation or some other organisation
where the facility of carry forward of gratuity is not admissible, the
amount of gratuity transferred by BDL should be refunded back to
BDL;
(c) In the case of an employee who has joined from another Public
Sector Undertaking and who has had his gratuity transferred to
BDL, the service in the other undertaking will be treated as
service in BDL for purpose of determining the liability for gratuity
and the quantum of gratuity payable at the time of termination of
Vol - IV / CHAPTER-X 72
5.1 (a) Gratuity will be equal to 15/26 of a months’ emoluments for each
completed year of service or part thereof in excess of six months subject to a
maximum of 16 ½ times the monthly emoluments or Rs.10,00,000/- whichever
is less.
(b) In the case of death, the amount of gratuity will be calculated as under (a)
above or as worked out below, whichever is more:-
6. NOMINATIONS:
(b) In the event of there being no nomination, the gratuity on death may be paid
in the manner indicated below:
(a) If there are one or more surviving members of the family as in (i) to (iv)
below, it may be paid to all such members other than any such member
who is a widowed daughter, in equal shares.
(b) If there are no such surviving members of the family, but there are one
or more surviving widowed daughters and/or one or more surviving
members of the family as in (v) to (x) below, the gratuity may be paid to
all such members, in equal shares.
ANNEXURE –I
(Rule – 3(a))
In respect of the said strike period, the principle ‘no work, no pay’ was
followed but to the best of our information, no order as to the break in service in
respect of any employee for this period was passed. Hence, benefits of
continuous service for this period has to be given, provided the employee has
worked for 240 days/120 days in the period of one year/six months as
explained in para-2 below :
(a) An employee rendered continuous service for not less than five years is
eligible for gratuity on superannuation or retirement or death or
disablement due to accident or disease. However, the completion of
continuous service of five years is not necessary if termination of
employment is due to death or disablement.
for 4 years 11 months 10 days, the AP High Court held that he will not
be eligible for gratuity for want of completion of five years.
(b) The meaning of the continuous service is, according to Section – 2 (A)
(1) of the Payment of Gratuity Act, every service rendered by the
employee shall be continuous service for a period, even if there is an
interruption during that period on account of (a) sickness or (b) accident
or (c) leave or (d) absence from duty without leave except when there is
break of service under orders passed as per the standing orders, rules
or regulations or (e) lay off, strike or lock out or a cessation of work not
due to any fault of the employee concerned. All interruption of the
above types have to be ignored and will not result in depriving the
employee of the benefit of continuous service.
(c) Ordinarily, calculation for the purpose is to be made from the date of
termination (because reference is to the period of 12 calendar months
preceding the date with reference to which calculation is to be made).
(i) Four consecutive days, within the meaning of Rule – 5 (7) of the
Company’s CDA Rules, an executive; and
(ii) Ten consecutive days, within the meaning of the Company’s
Standing Orders No.14 (b) & 14(c), an employee in non-executive
cadre.
(b) This is without prejudice to the usual consequences of violating the CDA
Rules/Standing Orders that may ensue.
(c) This break in service would be taken into account for payment of gratuity.
(i) When an employee left BDL and joined another Public Enterprise
between 5-5-1972 and 1-8-1977 the employee may be granted the
facility of carrying forward the gratuity earned during the service in
BDL, which shall be transferred to other Public Enterprise subject to
the conditions as mentioned below :
(a) The movement should have taken place with the consent of
both the PSUs.
(b) The gratuity for service of BDL will be calculated at the rate
of emoluments last drawn at the time of movement and
without interest.
(c) The above dispensation is limited only to those who are
continuing with the PSU to which they have moved and not
to persons who have either retired or have already left the
PSU for any reason, except in case they have joined another
PSU without any break in service.
(d) This dispensation will be allowed based on individual
requests.
1. The company will pay contribution every year to the Trust who will in turn
pay it as premium to the LIC under Group Gratutiy-cum-Life Insurance
Scheme.
3. LIC will hold the premium received, net of the amounts utilized as
premium for Life Insurance benefit and administrative expenses, if any,
in a running account for the credit of the Trust.
4. Interest will be allowed on the balance of this account from year to year
which will comprise a basic interest rate and a bonus interest rate which
will be determined by LIC for every year depending upon the interest
earned on its Group Gratuity Scheme Funds and also upon the size of
the Fund in a running account. The present rate of interest is 12.3%.
7. The scheme also provides for transfer of Gratuity liability from other
Public Sector Undertaking in the case of employees joining the
Company and vice-versa.
Authority 8. The Procedure for Forwarding Gratuity Claims to
Cir No.BDL/ BDL Employees Group Gratuity Trust is given in
03/21/GT Annexure-I.
Dt.01-07-1996.
Authority 9. The terms of reference of the BDL Gratuity Trust
PC No.20/96 are as under :
Dt.02-04-1996
ANNEXURE – I
1. The individual should fill Form ‘I’ and send to the respective
Divisional P&As.
2. The Divisional P&As should process claim for gratuity through their
respective finance departments.
(i) The P&A Division should forward the DD received from the
gratuity trust of other PSU along with the details of workings, in
form II.
(ii) The respective P&A should forward the statement of Gratuity duly
concurred by Internal Audit to the Secretary of the Trust along with
details of PSU to whom transfer is to be made. On receipt of this, the
Secretary will arrange to get the Gratuity from LIC of India and send to
the respective PSUs in form III.
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