CHAPTER : The Payment of Gratuity Act, 1972 (as amended up: CHAPTER CONTENTS 1 Definitions ‘A Payment of Gratuity (Sec, 4) A Forfeiture of Gratuity Q Compulsory Insurance (Sec. 4-A) Q Protection of Gratuity (Sec. 13) Nomination (Sec. 6) Determination of Gratuity (Sec. 7) Recovery of Gratuity (Sec, 3) Inspectors (Sec, 7-4, and 7-B) Penalties and Offences (Secs. 9 to 11) Miscellaneous Test Questions ito 24-5-2010) oooooogd Gratuity is a kind of retir ement benelit, like provident fund or pension. It is a pa i tended to help an employee alter his retire wr ig-awaited and progressive social security measure, loment in August, 1972. The Act came into force on 16th September: 1975" “Tt 1984, and then in 1987. The latest amendment to the Act wa: made in 10, with effect from 2 ee ae , 1972, there was no Central Act to regulate «Rayment of gratuity to industrial workers except the Working Journalists (Conditions of Service) ind Miscellaneous Provisions Act, 1955, The Government of Kerala enacted legislation in 1971 for iment of gratuity to workers employed in factories, plantations, shops and establishments. The est Bengal Employees’ Payment of Compulsory Gratuity Act, 1971 prescribed a similar scheme of ratuity. After the enactment of the Kerala and the West Bengal Acts, some other State ‘overnments also voiced their intention of enacting similar measures in thelr respective States. It ame necessary, therefore, to have a Central law on the subj ject so as— (1)_to ensure a uniform pattern of payment of gratuity to the employees throughout the untry, and146 INDUSTRIAL LAW (2) avoid different treatment to th : ie avold diferent treatment 10 the employees of establisiane:. having branches in more than tne State whe, under the conditions ol helt sevice. The vin savs wets eble teat from one State to another. Hence the Payment of Gratuily Act, 1972 on Aet is largely based on the West Bengal Employees’ Payment of Compulsory Gratuit ._ with some fications rel 0 forfeiture of in JAE wathieom modifications relating to forfeiture of gratuity i case of dismissal for gross The Act provides for a scheme of compulsory payment of gralvity by managements of factories, mines, oilfields, plantations, ports, railway companies, shops and other cstablishments employing 10 = more persons in the event of superannuation. retirement, resignation and death or disablement lue to accident or disease. The payment of gratuity is dependent on fulfilment of certain conditions prescribed in the Act. Itis to be calculated at the rate-of 15 days salary | y compl service, subject to a maximum of Rs. 10 lakh with effect from 24-5 to claim gratuity can be forfeited by the employer in certain cases, Reference to Sections in this Chapter. Unless otherwise indicated. reference to Sections yas brackets in this Chapter is to the Payment of Gratuity Act, 1972, as amended upto 24-5: Extent of the Act it shall The Act extends to the whole of India, But in so far as it relates to plantations or ports, i not extend to the State of Jammu and Kashmi te Scope of coverage ‘The Act applies to — (a) every factory, mine, oilfield, plantation, port and railway company; (&) ever ment the 1 1 of any law for the time being in force in relation fo shops and establishments in a State, in which 10 or more persons are employed, or were employed, on any day of the preceding 12 months ; () such other establishments, or class of establishments, in which 10 or more employees are employed, or were employed, on any day of the preceding 12 months, as the Central Government may, by notification published in the Official Gazette, specify in this behalf [Sec. 1 (3). — Th vie he wide jon of establishment the Municipalities are covered by Sec. 1 (3) (b) jide defini ‘The Act, being a social legislation, should be given more extensive application [Municipal Boar Gangapur v. Controlling Authority under POG Act, (1987) Lab IC 578 (Raj). hh the Act has become applicable shall continue to be governed ing that number of persons employed therein at any time after the Act falls below 10. This provision is intended to check the tendency among reduce the number of employees so as to get out of coverage under the A shop or establishment to whi ~~ The Act does not apply (a) apprentices, and (b)_persons who hold civil posts under the Central Government or a State Government and are governed by any other Act or by.any Rules providing for payment of gratuity (Sec. 2 (e ~The Government may, however, exempt any establishment covered by this Act from the provisions of the Act, i >t of gratuity or pensionary benefits not less favourable than the ben: _ iaPAYMENT OF GRATUITY ACT. 1972 147 DEFINITIONS 1. Appropriate Government {sev 2 (all, In relation to any of thi * }appropriate Government” means the Central Government : a) an establishment belonging to. or under the control of. th (b) an establishment having branches in more than one Stale. (c)_ an establishment of a factory belonging to, or under the control of, thw Cental Government, {d) an establishment of a major port, mine. oilfield or railway company In any other case, ‘appropriate Government’ means the State Government. 2. Completed year of service |Scc. 2 (b)]. It means continuous service for 1 year. 3. Continuous Service (Sec. 2 (cl]. Continuous service’ means continuous service as defined tn Sec. 2-A. An employee shall be said io be in continuous service for a period if he has. for that period, been in uninterrupted service, including service which may be interrupted on eccount (a)sickness, (b) accident, | (leave, (d) absence from duty without leave (not being absence in respect of which an order treating the. absence as break in service has been passed in accordance with the standing orders, rules or regulations governing the employees of the establishment), |e) lay-off, Wstrike, @)a lock-out, or | (Fjcessationof Work not due to any fault of the employe Ifthe service is interrupted ‘by causes other than # Central Gr ment . (See. 2-A, Clause 1). ich are mentioned in the definition, the service will be deemed to be interrupted and it will not fall within the definition of ‘continuous service’ [Dalmia Magnesite Corpn., Salem v. R.L. Commr., Madras (1982) Lab IC NOC 31]. Where an employee (not being an employee employed in a seasonal establishment) is_not in continuous service for any period of T year, he s e deme’ in continuous the employer for the said period of 1 year, if during the period of 12 calendar months preceding the dale with reference to which calculation is to be made, he has aclually worked under the employer for not less than — — (i) 190 days in the case of an employee employed below the establishment which works for less tk k and ound in a mine or any 240 days in any other case For determining the continuous service for any period of 6 months for the payment of gratuity, the number of days the employee should have actually worked should be hall the number of days actually worked which constitute continuous service fora period-of 1 year, Le, 95 and 120 respectively (Sec, 2-A, Clause 2). — For the purposes of Clause 2 of Sec. 2-A, the number of days on which an employee has actually worked under an employer shall include days on which— (i) he has been laid-off under an agreement or as permitted by standing orders made under the Industrial Employment (Standing Orders) Act, 1946 or under the Industrial Disputes Act, 1947, or under any other law applicable to the establishment ; (ii) he has been on leave with full wages, earned in the previdus year;INDUSTHIAL LAW = ‘onsing cut of and an sit has been on matemity leau plana me leave_The nto Clause 2 of Sec. 2-A) ployed in a seasonal establishment. is nol | of this maternity leave re an er e 1od of T year or 6 months. he shall be ia wear months. he shall be deemed to be in continu for such period if he has actually worked for not less than 75 pe ‘Wich the establishment was in operation during such period (See A The amendment in the definition of ‘conti e ition tinuous service’ shall be d e with effect from the 11th day of February, 1981 SSS have eee at . is Act 's-& Piece of social welfare legislation and deals with matters relating to pavment of gratuity w ich, like pension. provident fund, etc. isa retiral benefit. Interrupted sence by roesyrol Siciness, leave, lay-off, sirike, Toclrout or cessation-of work not due To any faull of the employee , Soncerned should not be regarded as a break in continuity of his service. The inclusive part of the definition of continuous service is fo amplify the meaning oF the expression by including interrupted pewice under certain contingencies which, but for such inclusion, would not fall within the ambit of the expression ‘continuous service’ [Lalappa Lingappa v. Laxmi Vishnu Mills, (1981) 2 SCC 238) The claim to gratuity is not forfeited by interruption in service, even though it is over a lon. period, if the break is condoned and the emplovee een allowed to resume employment Weewanlal (1929) Lid., Calcutta v. lis Workmen, AIR (1961) SC 1567]. 4, Controlling authority (Sec. 2{d)]. ‘Controlling authority’ means an authority appointed by the appropriate Government. Under Sec. 3, the appropriate Government may, by notification published in the Official Gazette, appoint any officer to be a controlling authority, who shall be responsible for the administration of the Act. Different controlling authorities may be appointed for different areas. 5. Employee [Sec. 2 (e]. ‘Employee’ means any person (other than an apprentice) employed on wages. The employee may be employed in any establishment, factory, mine, oilfield, plantation, port, railway company or shop. He may be employed to do any skilled, semi-skilled or unskilled, manual, supervisory, technical or clerical work. His terms of employment may be express or implied and it makes no difference whether or not such person is employed in a managerial or administrative capacity. The Payment of Gratuity (Amendment) Act, 1994 has abolished the limit of wages from the fion oftheterm ‘employee’. ‘Employee’ does not, however, include any such person who holds a post under the Central Government or a State Government and is governed by any other Act or by any rules providing for payment of gratuity. Prior to the amendment of the Act in 1984, ‘employee’ did not include any such person who was employed in a managerial or administrative capacity, or who was subject to the Air Force Act, 1950, or the Navy Act, 1957. However, now any such person, whether or not employed in a managerial or administrative capacity is an employee within the meaning of amended Sec. 2 (e). 6. Employer [Sec. 2 ()._In relation to any establishment, factory, mine, oilfield, plantation, i “or a port, railway company or shop belonging to or under the control of the imient OF State Government, ‘émployer’ means a person or authority appointed by the appropriate Government for the supervision and control of employees. Where no person or authority has-been so appointed, ‘employer’ means the head of the Ministry or the Department concerned [sec. 2(/) (i). Lin continuous service for any -under the emplover deiPMENT OF GRATUITY ACT, 1972 149 ot under the control of any fore above establishments belonging to control authority for the supervision 2 4 the chief executive officer of the loc. al + of any of the ‘employer’ means the person appointed by such rho person has been so appointed In case thority. ‘of employees or where authority [Sec. 2 (f (ul. In any other case. ‘employer’ means t control over the affairs of any establishment, company or ship. Where the said affairs are ent other person, whether called a manager, managin he person who oF the authority which has the ultimaie factory, mine. oilfield, plantation, port. railway rusted to any other person, ‘employer’ means such 1g director or by any other name [Sec. 2 (f (iil “farily’ shall be deemed to consist of 7. Family [Sec. 2 (h)). In the case of a male employee, himeclt, Hie csldres whether married oF unmarried, his dependent parents, and the depencet paren the widow and children of his predeceased son. if any [Sec. 2 (h) (i). The parents of his wife an. italicised words have been added by the Amendment Act of 1987 in the case of a Jemale employee. ‘family’ shall te deemed to consist of herself, her husband. her childron, whether married or unmarried, her dependent parents and the dependent parents of her husband and the widow and children ‘of her predeceased son, if any. Where the personal law of an employee permits the adoption by him of a child, any child lawfully adopted by him shall be deemed to be included in his family. Where a child of an employee has been adopted by another person and such adoption is. under the personal law of the person making such adoption, lawful, such child shall be deemed to be excluded from the family of that employee [Explanation to Sec. 2 (h)]. 8. Notification [Sec. 2 (k)]. It means a notification publishe 9. Retirement [Sec. 2 (ql). It means termination of the service © on superannuation. = —_ — .d in the Official Gazette. fan employee otherwise than The definition of the term ‘retirement’ is framed _in_the t_terms. Except for superannuation, any termination of service ‘would amount to ‘retirems for the purposes of the ‘Act Retrenchment is a termination of service. It is immaterial that the t mination is occasioned by She need to discharge surplus labour. That retirement implies the discharge of surplus labour was explained in Barsi Light Rly. Co. Ltd. v. K.N. Jogleker, AIR (1957) SC 121. Nonetheless, it mounts to termination of service [State of Punjab v. The Labour Court, Jalandhar, (1980) Lab. IC 1004}. 10. Superannuation [New Sec. 2 (r) as substituted by the Amendment Act of 1984]. ‘Superannuation’, in relation to an employee, means the attainment by the employe: ich age a is fixed in the contract or conditions of service as the age on the attainment of which the employee shall vacate the employment. The ferm ‘superannuation’ means retirement of an employee on attainment of a certain age. 11. Wages [Sec. 2 (s). ‘Wages’ means all emoluments which are earned by an employee while on duty oF on Teave in accordance with the terms and conditions of his employment and which are paid or are payable to him in cash. It includes dearness allowance, but it does not Include any bonus, commission, house rent allowarice, overtime wages and any other allowance. In Ambika Saw Mills v. Asstt, Lab. Commr., (1986) Lab. IC 1828 (Ori.), it has been held that supply of free food by the employer-company is merely an amenity and as such its money equivalent cannot form part of and be added to cash salary paid to employee to form his total wages for computing amount of gratuity payable to him. b Jz Other terms. The terms ‘factory’, ‘major port’, ‘mine’, ‘oilfield’, ‘plantation’, ‘port’ and ‘railway company’ have the meaning assigned to them in Sec. 2 (m) of the Factories Act, 1948, Sec. 3 (8) of the Indian Poris Act, 1908, Sec. 2 (I) () of the Mines Act, 1952, Sec. 3 (e) of the idsINDUSTRIAL LAW F ekds (Requaltion and Development) Act, 1948, Sec. 2 {s /+1 the Pi é f e ec he Piantations Labour Act. 1951 4 (4) of the Indian Ports Act, 1908, and Se 1 the Indian Railways Act. 1890 respectively PAYMENT AND FORFEITURE OF GRATUITY AND EXEMPTION (Secs. 4 and 5) Payment of gratuity (Sec. 4) gratuity by an employer to an emplayee as defined under the Act is mandatory. "es payable to an employee and. A Paymen Sec. 4 deals with circumstances in which gratuity becom cases when gratuily may be forfeited. The various provisions of Sec, 4 are discussed below “employment. Gratuit shall be payable to an is service for not 1. Gratuity payable on termination of is emi {ter be has rendered continunus 1 Gratulty :pavabis. ante of employee on the fermination of his employment al less than 5 years {a} on his superannuation, or Where an employee is_appointes superannuation, he is entitled of superannuation [Darshan Engg. retirement or resignation, .d_or continues in_2 ment_after the date_of_his service and not merely up to the age for the full period of servic thority, (1983) Lab. IC 1451) iy Works v. Controlling A scident or disease [Sec. 4 (1)] he_work which he was aeablement ce ‘Disat ins such disablement as incapacitates an. employee fort wh capable of performing before the accident or disease resulting in such disablement [Explanation to Sec. 4 (1)] isablement on reduced wages, his wages for the period riod for the xd by him during that pei sablement. his reduced (Sec. 4 ‘an employee is employed after his di ‘shall be taken to be the wages receive fuity payable to him, For the period subsequent to his d ‘omputing gratuity shall be taken to be the wages a5 $0 ¥ preceding his disablement purpose of computing grat wages for the purpose of c (4). sary where the termination.of ‘oviso 1 to Sec. 4 (1). In the loyee is due t lovee, gratuity payable_to_him. shall be paid to his nominee, If no ratuily payable to him shall be pald to his heirs. Where any the hare of gratul ‘such minor shall be deposited with the rity shall invest the amount so de ; deposited for the benefit ther financial institution, as may be pres ibed, until such_minor attains major 50 2 to Sec. 4 (1) as amended in 1987) 2, Rate of gratuity. For every completed year of service of part thereof in excess of 6 ‘months, the employer shall pay gratuity to 5 an employee at the rate of FF days" wages based n the rate of 5 fast drawn by the employee coi ed (Sec. F(2)]._ In the case ‘of a monthly rated employee calculated by dividing the monthly rate of wages last drawn_by 1 by | the quotient by 15 [Explanation to Sec. @ (2) as added by the The completion of conti of any emi or, he controlling aut if wages have to be iment. "A month being a period of 30 days inclusive of rests days and holidays, calcalated at monthly rate, 15 days” wages would be Bee ee employee would earn within a period ‘of 15 days and not in 15. working days (Swamy Vv. Controlling ‘Authority, Hyderabad, (1978) IR (1970) SC 919, it was Cloth & General Mills Co. Ltd. v. Workmen, A\ Lab, IC 1285]. In Delhiment OF GRATUITY ACT. 1972 iza rel that the expression “average «i ssc wage’ can only mean the wa Pram during a month divided by the nem of days for which he has « Do in onler to arrive at the monthly wage for tl: computation of gratuity pa <2 of a piece-rated employee. daly wages shall be computed on the average of the total ceived by him for a period of 3 months im nediately preceding the termination of his ind for this purpose, the wages paid for any overtime work shall not be taken into to Sec. 4 (2)]. In the case of an employee who is employed in a seasonal ) employed throughout the year, the employer shall pay the gratuity et 7 days’ wages h season [Proviso 2t0Sec. 4 (2). 1 establishment may be seasonal in so {ar as its seasonal employees are concerned, but u at the year fw nota seasonal establishment. Thus @ permane! a sugar factory (which is 2 5 J to gratuity at th of 15 days’ each completed year of servic Ear Hussein v. Payment of Gratuity Authority, i, (1979) Lab. IC 366}, 3._Maximum gratuity. The am: Rs, 2,50,000 [Sec. 4 (3}]. The Amendment Ac wages for payment of gratuity t rarned by @ ed and inultiplied by abie. ployee shall of 2¢ {_gratuity payable to an emy of 1994 replaced the ext 000. T! of gratuity under any award or agreement or contract t with the employer. In. Sec. 4 shall affect the right of the employee to receive better terms (Sec. 4 (5) itis true, as has been observed by the Supreme Court in. State of Punjab v. Labour Court, Jalandhar, AIR (1979) SC 1981, that the Act enacts a complete code containing detailed provisions covering ail essential features of the scheme for payment of gratuity. But it is also clear that the scheme envisaged by the enactment secures the minimum for the employees in that behalf and express provisions are found in the Act under which better terms of gratuity if already exsiting are hot merely preserved but better terms could be conferred on the employees in future. Exemption under 5. Sec. 5 empowers the appropriate Government to exempt, by notification pul in the Official Gazette, any establishment, factory, mine, oilfield, plantation, port, railway company or shop to which this Act applies, from the operation of the provisions of this Act if, in the opinion of the appropriate Government, employees in such establishment, etc., are in receipt of gratuity and pensionary benefits not less favourable than the benefits conferred under this Act (Sec. 5 (1)]. The Payment of Gratuity (Second) Amendment Act, 1984 has, by introducing new Sub-Sec. (2) to Sec. 5, authorised the appropriate Government, by notification published in the Official Gazette, to exempt any employee or class of employees in similar circumstances. The ‘Amendment Act of 1987 authorises the issue of notification under Sec. 5 (1) or (2) retrospectively but such notification shall not be issued so as to prejudiclally affect the interests of any person [Sec. 5 (8) as introduced by the Amendment Act of 1987]. - 5. Forfeiture of gratuity. 3) deals with cases i ich gratuity | employee may be forfeited, notwithstanding anything contained in Sec. 4 (1). Acco: gratuily of an employee whose services have been terminated for any act, wilful omission or negligence causing any damage or loss to, or destructio1 ‘of, property belongin: tothe employer, shall be forfeited to the extent of the damage or loss so caused (Sec. 4 (6) (a)]. Gratuity is paid to a workman to ensure, in addition to ‘other objects, good conduct of the workman throughout the period he serves the employer. The service must be long (which must.not be less than 5 years) and meritorious. ‘Long and meritorious’ service must mean long andthe end. As the pet wnod of service mien ve the conbnuity of meritonaus s rice be @ condition for mat the fusurance Ltd.» The Wornnien, AIR, (1967) S.C. 1286} But it has been held in a number of decided eases that even when @ workman usconduct, he cannot be deprived altogether of benelit of gratuity he has earned by past period of this case 1s that he must be paid his dues after deducting the amount of » Their Workmen AIR ts dismissed for sere. The proper rule in Juss caused to the employer by his misconduct [Hindustan Times 1. td (1963) SC 1332 ; Garment Cleaning Works v. Their Workmen. AIR (1962) 678 , Wenger & Co. wv Their Workmen, (1973) 2 LLJ 403]. The gratuity payable to an employee may be wholly or partially forfeited if the servic employee have been terminatedfor— {i) his riotous or disorderly conduct or at (ii) any act which constitutes an offence _provided that commitied by him i urse of his employment [Sec. 4 (6) (b]. Any decision to forfeit rovalty-can Fowever be taken only alter affording opportunity of hearing to the emplayee |BharatGold Mines Utd. v. Regional Labour Commr. (1986) Lab. IC 1976, (Kant.) (DBI). s an offence involving moral turpitude and consequently if the services of an employee erminated for committing thelt int e couse.of Hr erployment. the gray Pavae him under the provisions of the Act stands forfeited in view of Sec. 4 (6) (b) (i (Bharat Gold Mines Lid. v. The Regional Labour Commr., Supra) COMPULSORY INSURANCE AND PROTECTION OF GRATUITY. (Secs. 4-A and 13) sof such other act of violence wolving moral turpitude, at such offence is Compulsory insurance (Sec. 4-A) “The Amendment Act of 1987 has made provision for compulsory insurance of employer's liability to pay gratuity under the Act or in the alternative for the seffing up_of a gratuity fund in Felation to establishments employing 500 or more employees. This has been done by introducing a new Sec. 4A in the Act. ‘According to Sec. 4-A, every employer shall obtain an insurance for his liability for payment towards the gratuity under the Act from the Life Insurance Corporation or any other prescribed insurer with effect from such date as may be notified by the appropriate Government in this behalf. ‘This is however subject to the provisions of Sec, 4-A (2) [Sec. 4-A (1)]. Sec. 4-A (1) does not apply to an employer or an establishment belonging to, or under the control of, the Central Government. Exemption. The appropriate Government may exempt— a] every employer who had already established an approved gratuity fund in respect of his employees and who desires to continue such arrangement, and ©) every employer employing 500 or more persons who establishes an approved gratuity fund under the provisions of the Act. ‘The appropriate Government may prescribe conditions in regard to the above [Sec. 4-A (2)] ‘Approved gratuity fund! shall have the same meaning as in Sec. 2 (5) of the Income-tax Act, 1961 [Explanation Sec. 4-A\. Registration with controlling authority. Every employer shall within such time as may be piasctted get He exelent roponrad is establishment registered with the controlling authority in the prescribed manner. An employer shall not be registered under the provisions of Sec. 4-A unless he has —ENT OF GRATUITY ACT, 1472 153 an insurance refer red) {tablished an approved grany: Rules to be made by the approy noufication published in the Official G ie The rules may Provide for — (a) the composition of the Board of Trustees of Trustees of the approved gratuity fund, and (b) the recovery by the contra ollng authority of the amount of gratuity payabi {rom the Life Insurance Corporation a india or any other insurer with whom ai ' taken under Sec. 4-A (1), ae ane or as the case may be. the Board of Trustees of the apr Failure to pay insurance premium or contribution. Where an emplover fails to pay insurance premium [under Sec. 4-A (1)| premi | or any contribution to an approved gratuity fund under Sec (AGI he shall be liable to pay the amount of gratuity due under the Acre lading interes {or delayed payments) forthwith to the controling authority See, A Whee contravenes this provision shal be punishable with tine which may extend to Rs. 10.000 and in the case of a olfence continues [Sec. 4-A (6) CB Protection of gratuity (Sec. 13) No gratuity payable under this Act and no gratuity payable to an employee employed in any establishment, factory, mine, oilfield, Plantation, port, railway company or shop exempted under Sec. 5 shall be liable to attachment in execution of any decree or order of any civil, revenue or Criminal Court (Sec. 13 ; Caleutta Dock Labour Board v. Sandhya, (1985) Lab. LC. 714 (S Cl} Sec. 60 (g) of the Civil Procedure Code, 1908 also makes a simila 1 provision, However gratuity payable to the heirs of an employee on his death is attachable [Ramuwati v. Krishan Gopal, (1988) Lab. 1.C. 1298 (Del). — NOMINATION {Sec. 6) Each employee, as defined in the Act, is re period and in the specified manner, The rules rel (1) Nomination within 90/30 days. Each employee, who has completed 1 year of service, after the commencement of the Payment of Gratuity (Central) Rules, 1972, shall make within 90 de lays, and each employee who completes 1 year of service ajter the date of the commencement of these rules, within lays of completion of 1 year of service, a nomination (Sec. 6 (1) read with. Rule 6 (1)). tred to in Sec. 4-A (2) [Sec. 4. (3)) rnmeni. The appropriate Government may. by make Tules to give effect to the provisions of Sec. 4-A ible to an employee quired to make a nomination within a specified lating to nomination are as follows : (2) Distribution of amount of gratuity. An employee may, in his nomination, distribute the amount of gratuity payable to him under the Act amongst more than one nominee [Sec. 6 (2). (3) Nomination in favour of family members, If an employee has a family at the time of ‘making a nomination, the nomination shall be made in favour of one or more members of his family. To protect the interests of the family, it has been’ specifically provided that any nomination made by such employee in favour of a person who is not a member of his family shall be void [Sec. 6 (3). . But if at the time of making a nomination the employee has no family, the nomination may be made in favour of any person, Ifthe employee ‘subsequently acquires a family, such nominationrocsmmar aw & stall forthwith become invalid and the employee shall make, within 90. day sSOur BT One or more Members of hs Tanuds (Sec_6 Alread with Rule @(i} interest [Sec. 6 (6 (6) Safe custody of nominai Cs _nomina Every nomination, fresh_nomin omination, as the case may be, shall be sent by the employee to his emplover. who shall keep the fe custody [Sec. 6 ( of re same in hi Farther it sh is urther, it shall take effect from the date of receipt of the same by the employer [Rule 6 (6), DETERMINATION AND RECOVERY OF GRATUITY (Secs. 7 and 8) Determination of the amount of gratuity (Sec. 7) Application for gratuity. An employee who is eligible for payment of gratuity _under the Act, or any person authorised, in writing, to act on his behalf, shall send an application to the employer ordinarily within 30 days from the date the gratuity became payable for payment of such gratuity. But where the date of superannuation or retirement of an employee is know employee may apply to the employer before 30 davs of the date of superannuation or reti (Sec. 7 (1), Rule 7 (1)}. ‘The other Rules relating to application for gratuity are as follows : 1. A nominee of an employee who is eligible for payment of gratuity shall apply ordinarily within 30 days from the date the gratuity became payable to him [Rule 7 (2)]. 2. A legal heir of an employee who is eligible for payment of gratuity shat! apply ordinarily within 1 year from the date the gratuity became payable to him by the employer [Rule 7 (3)]. 3. An application for payment of gratuity filed after the expiry of the periods specified in Rule 7 shall be entertained by the employer, if the applicant adduces sufficient cause for the delay (Rule 7 (5). Determination of gratuity. As soon as gratuity becomes payable the employer shall detérmine the amount of gratuity and give notice in writing to the person to whom the gratuity Is payable. Notice is also to be given To the controlling authority ‘specifying the amount of gratuity so determined. This exercise is to be done by the employer irrespective of the fact whether an in for payment of gratuity has been made or not [Sec. 7 (2)}. Payment of gratuity. The employer shall arrange to pay the amount of gratuity within 30 days from the date it becomes payable to the person to whom the gratuity Is payabl le (Sec. 7 (3)]. This limit of 30 days for the payment of gratuity has been introduced by the Amendment Act of 1987, Payment of interest, This is a new provision made by the Amendment Act of 1987. If the anuount of aaty payable bY the employers not pee win 2 pad of 0 ass the employer al pay simple intrest a UE “te, not exceeding the ate noted by the Censl Government from fime to time for repayment of long-term deposits. The Government may specify such rate of interest by notification published in the Official Gazette. The interest shall be payable from the date on which the gratuity becomes payable to the tion or _alteration_ofTh foument oe Graduite Reb, 1972 Byears ow wore atic Leawsrrayyos | veftivemenk More thaw 10 ernployees Limb Ro Lace In ease Dealw, no | Yeu woo has Worked. Fost : 15 XY Last dsawnsolanx Ten wee F owen Re cece alors Lasrdraun salary — Basis wersds +DA “Temwre QOY4TSs T MOMS 21 year Rous S Tens es 2042008 a 4 Basic OA HRA compares iyg, IO BASS Rerdbleyet 50,90 Bom 10600 10,900 20 710,009 Empleyer 2 100,208 80/000 10/098 10,090 Bo 1130/000 Brnployer 3 gojc00 10002 F/002 19/000 4, 49,000 Employee 1 )5x 7.002020 = 6, 76,000 ae Brnplayer 2 15x UBABVOABE = 2BGOLON 8B cant Re 5 xo a Em ploye 3 15x noes - NIL Tr Casest Dat : - Less Tham On Yeo — OnE yan oF more oud uxsthan SY et = Syeans on more out fextman UV yerrs — yi yeors ox rare Tout lexsthaw 204803 — ROYER, OF OTE Comdkin on G} Sycams welaned — 24imes of baste poy — & Vrens & Basie PAY — \24Fimesot paxic pay _ 2octimes 6 Pasic Pay 33 Hivesof aie Pay