by:

Nishtha Sharma
Puja Mittal
Ritika Khanna
Shivangi Verma
Sonal Agarwal

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.

Proposal for enactment was discussed in:
Labour Ministers Conference {Aug 24 & 25}
Indian Labour Conference {Oct 22 & 23}

A bill was passed as the Payment Of Gratuity Act
1972.

Appropriate Govt.
In relation to an establishment:
a) Belonging to, or under the control of Central
Government.
b) Having branches in more than one state.
c) Of a major port, mine, oilfield or railway company,
the Central Govt.
In any other case, the State Government.
Controlling Authority-an authority appointed by the
appropriate govt.


The Act applies to the whole of India.
The Act applies to:
Every mine , factory, oilfield, plantation, port &
railway company.
Every shop or establishment in which 10 or more
persons are employed.
The Act does not apply to:
Persons who hold civil Posts under the Central
Government or State Government.
It is a payment that is intended to help an
employee after his retirement whether the retirement
is due to super-annuation or due to some physical
disability.
Formula Of Gratuity =(Last Month Wages
*15*No. of Services)/26


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
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.
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.


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

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 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.



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.
Appointed by the Government for the purpose of
this act.
Two or more inspector can be appoint for the same
area.
Every Inspector shall be deemed to be a public
servant within the meaning of section 21, of the
Indian Penal Code, 1860.


Ask for any information from the employer.
Examining any register, record or notice or other
documents.
Search and seize register, record, notice or other
document in respect of offence;

Controlling authority issued certificate to the
collector on behalf of aggrieved party.
Collector recover the amount together with
compound interest.
Amount of interest should not exceed the amount of
gratuity.

(1) Whoever, for the purpose of avoiding any payment to be
made by himself under this Act or of enabling any other
person to avoid such payment, knowingly makes or causes to
be made any false statement or false representation shall be
punishable with imprisonment for a term which may extend
to six months, or with fine which may extend to ten thousand
rupees or with both.
2) An employer who contravenes, or makes default in
complying with, any of the provisions of this Act or
any rule or order made there under shall be punishable
with imprisonment for a term which shall not be less
than three months but which may extend to one year,
or with fine which shall not be less than ten thousand
rupees but which may extend to twenty thousand
rupees, or with both


Where an employer is charged with an offence punishable
under this Act, he shall be entitled, upon complaint duly
made by him and on giving to the complainant not less than
three clear days notice in writing of his intention to do so, to
have any other person whom he charges as the actual offender
brought before the court at the time appointed for hearing the
charge; and if, after the commission of the offence has been
proved, the employer proves to the satisfaction of the court
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
section shall be liable to attachment in execution of
any decree or order of any civil, revenue or criminal
court.
.
The appropriate Government may, by notification
make rules for the purpose of carrying out the
provisions of this Act.
Every rule made by the Central Government under
this Act shall be laid, as soon as may be after it is
made, before each House of Parliament while it is in
session.
Thank you