THE PAYMENT OF GRATUITY ACT, 1972

PREAMBLE

What is the subject matter of the Payment of Gratuity Act, 1972?

Scheme for the payment of gratuity to employees and matters connected therewith or incidental thereto.

What is the Act number of the Payment of Gratuity Act, 1972?

Act No. 39 of 1972.

On what date was the Payment of Gratuity Act, 1972 enacted?

21st August, 1972.

What is the object of the Payment of Gratuity Act, 1972?

To provide a scheme for the payment of gratuity to employees engaged in factories, mines, oilfields, plantations, ports, railway companies, shops or other establishments and for matters connected therewith or incidental thereto.

What is the subject matter of Section 1?

Short title, extent, application and commencement.

What is the short title of the Act?

The Payment of Gratuity Act, 1972.

To what extent does the Payment of Gratuity Act, 1972 extend?

It extends to the whole of India.

What is the exception to the extent of the Act?

In so far as it relates to plantations or ports, it does not extend to the State of Jammu and Kashmir.

To which establishments does the Act apply under Section 1(3)(a)?

Every factory, mine, oilfield, plantation, port and railway company.

To which shops or establishments does the Act apply under Section 1(3)(b)?

Every shop or establishment within the meaning of the law relating 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.

To which other establishments does the Act apply under Section 1(3)(c)?

Such other establishments or class of establishments in which ten or more employees are employed, or were employed, on any day of the preceding twelve months, as the Central Government may specify by notification.

What is the minimum number of employees required for applicability under Sections 1(3)(b) and 1(3)(c)?

Ten or more employees employed, or having been employed, on any day of the preceding twelve months.

Who may specify other establishments for the applicability of the Act?

The Central Government.

How may the Central Government specify other establishments under Section 1(3)(c)?

By notification.

Does the Act cease to apply if the number of employees subsequently falls below ten?

No.

When does the Payment of Gratuity Act, 1972 come into force?

On such date as the Central Government may appoint by notification.

Who appoints the date of commencement of the Act?

The Central Government.

What is the subject matter of Section 2?

Definitions.

Who is the appropriate Government in relation to an establishment belonging to or under the control of the Central Government?

The Central Government.

Who is the appropriate Government in relation to an establishment having branches in more than one State?

The Central Government.

Who is the appropriate Government in relation to a factory belonging to or under the control of the Central Government?

The Central Government.

Who is the appropriate Government in relation to a major port, mine, oilfield or railway company?

The Central Government.

Who is the appropriate Government in cases other than those specified in Section 2(a)(i)?

The State Government.

What does "completed year of service" mean?

Continuous service for one year.

What does "continuous service" mean under the Act?

Continuous service as defined in Section 2A.

Who is the "Controlling Authority" under the Act?

An authority appointed by the appropriate Government under Section 3.

Who is an "employee" under the Payment of Gratuity Act, 1972?

Any person, other than an apprentice, employed for wages, whether the terms of employment are express or implied, in any kind of work, manual or otherwise, in or in connection with the work of a factory, mine, oilfield, plantation, port, railway company, shop or other establishment to which the Act applies.

Who is excluded from the definition of "employee" under the Act?

A person holding a post under the Central Government or a State Government who is governed by any other Act or rules providing for payment of gratuity.

What does "employer" mean in relation to an establishment belonging to or under the control of the Central Government or a State Government?

The person or authority appointed by the appropriate Government for the supervision and control of employees or, where none is appointed, the head of the Ministry or Department concerned.

Who is the employer in relation to an establishment belonging to or under the control of a local authority?

The person appointed by the local authority for the supervision and control of employees or, where none is appointed, the chief executive officer of the local authority.

Who is the employer in cases other than those specified in Section 2(f)(i) and (ii)?

The person or authority having ultimate control over the affairs of the establishment or, where such affairs are entrusted to another person, that person.

What does "factory" mean under the Act?

A factory as defined in Section 2(m) of the Factories Act, 1948.

Who constitutes the family of a male employee under the Act?

The employee himself, his wife, his children whether married or unmarried, his dependent parents, the dependent parents of his wife, and the widow and children of his predeceased son, if any.

Who constitutes the family of a female employee under the Act?

The employee herself, her husband, her children whether married or unmarried, her dependent parents, the dependent parents of her husband, and the widow and children of her predeceased son, if any.

Is a lawfully adopted child included in the family of an employee?

Yes, where the employee's personal law permits adoption.

Is a child of an employee who has been lawfully adopted by another person included in the employee's family?

No, such child is deemed to be excluded from the employee's family.

What does "major port" mean under the Act?

A major port as defined in Section 3(8) of the Indian Ports Act, 1908.

What does "mine" mean under the Act?

A mine as defined in Section 2(1)(j) of the Mines Act, 1952.

What does "notification" mean under the Act?

A notification published in the Official Gazette.

What does "oilfield" mean under the Act?

An oilfield as defined in Section 3(e) of the Oilfields (Regulation and Development) Act, 1948.

What does "plantation" mean under the Act?

A plantation as defined in Section 2(f) of the Plantations Labour Act, 1951.

What does "port" mean under the Act?

A port as defined in Section 3(4) of the Indian Ports Act, 1908.

What does "prescribed" mean under the Act?

Prescribed by rules made under this Act.

What does "railway company" mean under the Act?

A railway company as defined in Section 3(5) of the Indian Railways Act, 1890.

What does "retirement" mean under the Act?

Termination of the service of an employee otherwise than on superannuation.

What does "superannuation" mean under the Act?

Attainment by the employee of the age fixed in the contract or conditions of service at which the employee is required to vacate the employment.

What are "wages" under the Payment of Gratuity Act, 1972?

All emoluments earned by an employee while on duty or on leave in accordance with the terms and conditions of employment and paid or payable in cash, including dearness allowance.

What is excluded from "wages" under the Payment of Gratuity Act, 1972?

Bonus, commission, house rent allowance, overtime wages and any other allowance.

What is the subject matter of Section 2A?

Continuous Service.

When is an employee said to be in continuous service?

An employee is said to be in continuous service if he has been in uninterrupted service for the relevant period.

Which interruptions do not break continuous service under Section 2A(1)?

Sickness, accident, leave, absence from duty without leave not treated as a break in service under the applicable standing orders, rules or regulations, lay-off, strike, lock-out or cessation of work not due to any fault of the employee do not break continuous service.

When does absence from duty without leave break continuous service?

Absence from duty without leave breaks continuous service only where an order treating such absence as a break in service has been passed in accordance with the standing orders, rules or regulations governing the employees of the establishment.

Does continuous service include service rendered before or after the commencement of the Act?

Continuous service includes service rendered before as well as after the commencement of this Act.

When is a non-seasonal employee deemed to be in continuous service for one year?

A non-seasonal employee is deemed to be in continuous service for one year if he has actually worked for the prescribed minimum number of days during the preceding twelve calendar months.

How many days must a non-seasonal employee employed below the ground in a mine or in an establishment working for less than six days a week actually work to be deemed in continuous service for one year?

Not less than one hundred and ninety days.

How many days must any other non-seasonal employee actually work to be deemed in continuous service for one year?

Not less than two hundred and forty days.

When is a non-seasonal employee deemed to be in continuous service for six months?

A non-seasonal employee is deemed to be in continuous service for six months if he has actually worked for the prescribed minimum number of days during the preceding six calendar months.

How many days must a non-seasonal employee employed below the ground in a mine or in an establishment working for less than six days a week actually work to be deemed in continuous service for six months?

Not less than ninety-five days.

How many days must any other non-seasonal employee actually work to be deemed in continuous service for six months?

Not less than one hundred and twenty days.

Which lay-off period is included in the number of days actually worked under the Explanation to Section 2A(2)?

Days of lay-off under an agreement or as permitted by standing orders made under the Industrial Employment (Standing Orders) Act, 1946, the Industrial Disputes Act, 1947, or any other law applicable to the establishment are included.

How is leave with full wages treated while computing the number of days actually worked?

Leave with full wages earned in the previous year is included in the number of days actually worked.

How is absence due to temporary disablement arising out of and in the course of employment treated while computing the number of days actually worked?

Such absence is included in the number of days actually worked.

How is maternity leave treated while computing the number of days actually worked?

Maternity leave is included in the number of days actually worked, subject to a maximum period of twelve weeks.

When is an employee employed in a seasonal establishment deemed to be in continuous service?

An employee employed in a seasonal establishment is deemed to be in continuous service if he has actually worked for not less than seventy-five per cent of the number of days on which the establishment was in operation during the relevant period.

What is the subject matter of Section 3?

Controlling Authority.

Who appoints the Controlling Authority under the Payment of Gratuity Act, 1972?

The Appropriate Government appoints the Controlling Authority.

How is the Controlling Authority appointed under Section 3?

By notification.

Who may be appointed as the Controlling Authority under Section 3?

Any officer may be appointed as the Controlling Authority.

What is the duty of the Controlling Authority under Section 3?

The Controlling Authority is responsible for the administration of this Act.

Can different Controlling Authorities be appointed under the Act?

Different Controlling Authorities may be appointed for different areas.

What is the subject matter of Section 4?

Payment of Gratuity.

When does gratuity become payable under Section 4(1)?

Gratuity becomes payable on termination of employment after the employee has rendered continuous service for not less than five years.

On which events is gratuity payable under Section 4(1)?

On superannuation, retirement or resignation, or death or disablement due to accident or disease.

Is five years' continuous service necessary where termination is due to death or disablement?

Completion of five years' continuous service is not necessary where termination of employment is due to death or disablement.

To whom is gratuity payable on the death of an employee?

Gratuity is payable to the nominee or, if no nomination has been made, to the heirs.

What shall be done with the gratuity share of a minor nominee or heir?

The share of the minor shall be deposited with the Controlling Authority.

How shall the Controlling Authority deal with the gratuity deposited for a minor nominee or heir?

The Controlling Authority shall invest it for the benefit of the minor in such bank or other financial institution as may be prescribed until the minor attains majority.

What does "disablement" mean for the purposes of Section 4?

Disablement means such disablement as incapacitates an employee for the work which he was capable of performing before the accident or disease resulting in such disablement.

At what rate is gratuity payable for every completed year of service or part thereof in excess of six months?

Gratuity is payable at the rate of fifteen days' wages based on the rate of wages last drawn by the employee.

How are the daily wages of a piece-rated employee computed for payment of gratuity?

On the average of the total wages received during the three months immediately preceding termination of employment, excluding overtime wages.

At what rate is gratuity payable to an employee employed in a seasonal establishment who is not employed throughout the year?

Gratuity is payable at the rate of seven days' wages for each season.

How are fifteen days' wages calculated in the case of a monthly-rated employee?

By dividing the monthly rate of wages last drawn by twenty-six and multiplying the quotient by fifteen.

What is the maximum amount of gratuity payable under Section 4(3)?

The amount of gratuity payable to an employee shall not exceed ten lakh rupees.

How are wages computed for gratuity where an employee is employed on reduced wages after disablement?

Wages for the period preceding disablement shall be taken as the wages received before disablement and wages for the period subsequent to disablement shall be taken as the reduced wages.

Does Section 4 affect an employee's right to receive better terms of gratuity?

Nothing in Section 4 affects the right of an employee to receive better terms of gratuity under any award, agreement or contract with the employer.

To what extent may gratuity be forfeited for damage or loss caused to the employer's property?

Gratuity shall be forfeited to the extent of the damage or loss caused by an act, wilful omission or negligence of the employee.

What is the condition for forfeiture of gratuity under Section 4(6)(a)?

The employee's services must have been terminated for an act, wilful omission or negligence causing damage, loss or destruction of the employer's property.

When may the gratuity of an employee be wholly or partially forfeited?

Gratuity may be wholly or partially forfeited if the employee's services are terminated for riotous or disorderly conduct, any other act of violence, or an offence involving moral turpitude committed in the course of employment.

When may gratuity be wholly or partially forfeited for misconduct under Section 4(6)(b)(i)?

When the employee's services are terminated for riotous or disorderly conduct or any other act of violence.

When may gratuity be wholly or partially forfeited for an offence involving moral turpitude?

When the employee's services are terminated for an act constituting an offence involving moral turpitude committed in the course of his employment.

What is the subject matter of Section 4A?

Compulsory Insurance.

From when does compulsory insurance under Section 4A become applicable?

From such date as may be notified by the Appropriate Government.

Who is required to obtain compulsory insurance under Section 4A(1)?

Every employer, other than an employer of an establishment belonging to or under the control of the Central Government or a State Government.

For what liability must an employer obtain insurance under Section 4A(1)?

Liability for payment of gratuity under this Act.

From whom may insurance be obtained under Section 4A(1)?

From the Life Insurance Corporation of India or any other prescribed insurer.

How shall insurance under Section 4A(1) be obtained?

In the prescribed manner.

Can different dates be appointed for compulsory insurance under Section 4A?

Different dates may be appointed for different establishments, classes of establishments or different areas.

Which employers may be exempted from compulsory insurance under Section 4A(2)?

Employers who had already established an approved gratuity fund and wish to continue it, and employers employing five hundred or more persons who establish an approved gratuity fund in the prescribed manner.

Who grants exemption from compulsory insurance under Section 4A(2)?

The Appropriate Government.

On what conditions may exemption under Section 4A(2) be granted?

Subject to such conditions as may be prescribed.

What must every employer do for the effective implementation of Section 4A?

Get the establishment registered with the Controlling Authority within the prescribed time and in the prescribed manner.

When shall an employer be registered under Section 4A(3)?

Only if he has obtained the prescribed insurance or established an approved gratuity fund.

Who may make rules to give effect to Section 4A?

The Appropriate Government.

What matters may the rules under Section 4A(4) provide for?

The composition of the Board of Trustees of the approved gratuity fund and recovery of gratuity by the Controlling Authority from the insurer or the Board of Trustees.

What is the consequence if an employer fails to pay the insurance premium or contribution to the approved gratuity fund?

The employer shall forthwith pay the gratuity due under this Act, including interest for delayed payment, to the Controlling Authority.

What is the punishment for contravening Section 4A(5)?

Fine which may extend to ten thousand rupees.

What is the punishment for a continuing contravention of Section 4A(5)?

A further fine which may extend to one thousand rupees for each day during which the offence continues.

What does "approved gratuity fund" mean for the purposes of Section 4A?

An approved gratuity fund as defined in Section 2(v) of the Income-tax Act, 1961.

What is the subject matter of Section 5?

Power to exempt.

Who may exempt an establishment from the operation of the Act under Section 5(1)?

The Appropriate Government may exempt an establishment by notification.

How may an exemption under Section 5(1) be granted?

By notification and subject to such conditions as may be specified in the notification.

Which establishments may be exempted under Section 5(1)?

Any establishment, factory, mine, oilfield, plantation, port, railway company or shop to which this Act applies.

On what ground may an establishment be exempted under Section 5(1)?

Where, in the opinion of the Appropriate Government, the employees receive gratuity or pensionary benefits not less favourable than those conferred under this Act.

Who may exempt an employee or class of employees from the operation of the Act under Section 5(2)?

The Appropriate Government may exempt an employee or class of employees by notification.

How may an exemption under Section 5(2) be granted?

By notification and subject to such conditions as may be specified in the notification.

On what ground may an employee or class of employees be exempted under Section 5(2)?

Where, in the opinion of the Appropriate Government, they receive gratuity or pensionary benefits not less favourable than those conferred under this Act.

Can a notification under Section 5 be issued retrospectively?

A notification under Section 5(1) or Section 5(2) may be issued retrospectively.

How far retrospectively can a notification under Section 5 be issued?

Not earlier than the date of commencement of this Act.

What restriction applies to retrospective notifications under Section 5(3)?

No retrospective notification shall be issued so as to prejudicially affect the interest of any person.

What is the subject matter of Section 6?

Nomination.

When is an employee required to make a nomination under Section 6(1)?

After completing one year of service.

Within what time and in what manner shall an employee make a nomination under Section 6(1)?

Within the prescribed time, in the prescribed form and in the prescribed manner.

For what purpose is a nomination made under Section 6?

For the purposes of the second proviso to Section 4(1).

Can an employee distribute gratuity among more than one nominee?

An employee may distribute the gratuity payable under this Act among more than one nominee.

In whose favour shall an employee having a family make a nomination?

In favour of one or more members of his family.

What is the effect of a nomination made by an employee having a family in favour of a person who is not a family member?

Such nomination is void.

In whose favour may an employee having no family make a nomination?

In favour of any person or persons.

What is the effect of a nomination made by an employee without a family if he subsequently acquires a family?

Such nomination shall forthwith become invalid.

What is the duty of an employee who acquires a family after making a nomination?

He shall make a fresh nomination in favour of one or more members of his family within the prescribed time.

When may an employee modify a nomination?

At any time, subject to Sections 6(3) and 6(4).

How may a nomination be modified under Section 6(5)?

By giving the employer written notice in the prescribed form and manner of the intention to modify the nomination.

What is the effect if a nominee predeceases the employee?

The interest of the nominee shall revert to the employee.

What is the duty of an employee when a nominee predeceases him?

The employee shall make a fresh nomination in the prescribed form in respect of that interest.

To whom shall every nomination, fresh nomination or alteration of nomination be sent?

To the employer.

What is the duty of the employer regarding nominations?

The employer shall keep every nomination, fresh nomination or alteration of nomination in safe custody.

What is the subject matter of Section 7?

Determination of the amount of Gratuity.

Who may apply for payment of gratuity under Section 7(1)?

A person eligible for payment of gratuity or a person authorised in writing to act on his behalf.

How shall an application for payment of gratuity be made under Section 7(1)?

By a written application to the employer within the prescribed time and in the prescribed form.

When shall the employer determine the amount of gratuity under Section 7(2)?

As soon as gratuity becomes payable.

Is the employer required to determine the amount of gratuity even if no application has been made?

The employer shall determine the amount of gratuity whether or not an application under Section 7(1) has been made.

To whom shall the employer give notice after determining the amount of gratuity?

To the person to whom the gratuity is payable and to the Controlling Authority.

What shall the employer specify in the notice under Section 7(2)?

The amount of gratuity determined.

Within what period shall the employer pay the amount of gratuity?

Within thirty days from the date on which the gratuity becomes payable.

To whom shall the employer pay the gratuity under Section 7(3)?

To the person to whom the gratuity is payable.

What is the consequence of failure to pay gratuity within thirty days?

The employer shall pay simple interest from the date the gratuity becomes payable till the date of payment.

At what rate is interest payable under Section 7(3A)?

At such rate, not exceeding the rate notified by the Central Government from time to time for repayment of long-term deposits, as may be specified by notification.

Who specifies the rate of interest payable under Section 7(3A)?

The Central Government, by notification.

When is interest not payable on delayed payment of gratuity?

Where the delay is due to the fault of the employee and the employer has obtained prior written permission from the Controlling Authority for the delayed payment on that ground.

What shall the employer do if there is a dispute regarding gratuity under Section 7(4)(a)?

The employer shall deposit with the Controlling Authority the amount admitted by him to be payable as gratuity.

On which matters may a dispute arise under Section 7(4)(a)?

The amount of gratuity payable, the admissibility of any claim for payment of gratuity, or the person entitled to receive the gratuity.

Who may apply to the Controlling Authority for deciding a dispute under Section 7(4)(b)?

The employer, the employee or any other person raising the dispute.

What shall the Controlling Authority do before deciding a dispute under Section 7(4)(c)?

The Controlling Authority shall hold a due inquiry and give the parties a reasonable opportunity of being heard.

What shall the Controlling Authority do if, after inquiry, any amount is found payable to the employee?

The Controlling Authority shall direct the employer to pay such amount or such amount reduced by the amount already deposited by the employer.

To whom shall the Controlling Authority pay the amount deposited by the employer?

To the person entitled thereto.

Does the Controlling Authority pay any excess amount deposited by the employer?

The Controlling Authority shall pay the amount deposited, including any excess amount, to the person entitled thereto.

When shall the Controlling Authority pay the amount deposited under Section 7(4)(e)?

As soon as may be after the deposit is made.

To whom shall the Controlling Authority pay the deposited amount where the applicant is the employee?

To the employee.

To whom shall the Controlling Authority pay the deposited amount where the applicant is not the employee and there is no dispute regarding entitlement?

To the nominee or, as the case may be, the guardian of such nominee or the heir of the employee, if satisfied that there is no dispute regarding the applicant's right to receive the gratuity.

What powers does the Controlling Authority have while conducting an inquiry under Section 7(4)?

The Controlling Authority has the same powers as a Civil Court trying a suit under the Code of Civil Procedure, 1908, in respect of the matters specified in Section 7(5).

What power does the Controlling Authority have regarding attendance of persons during an inquiry?

The Controlling Authority may enforce the attendance of any person and examine him on oath.

What power does the Controlling Authority have regarding documents during an inquiry?

The Controlling Authority may require the discovery and production of documents.

What power does the Controlling Authority have regarding affidavits during an inquiry?

The Controlling Authority may receive evidence on affidavits.

What power does the Controlling Authority have regarding examination of witnesses?

The Controlling Authority may issue commissions for the examination of witnesses.

What is the nature of an inquiry under Section 7?

An inquiry under Section 7 is a judicial proceeding within the meaning of Sections 229 and 228 and for the purposes of Section 267 of the Bharatiya Nyay Sanhita.

Who may prefer an appeal under Section 7(7)?

Any person aggrieved by an order under Section 7(4).

Within what period may an appeal under Section 7(7) be preferred?

Within sixty days from the date of receipt of the order.

To whom does an appeal under Section 7(7) lie?

To the Appropriate Government or such other authority as may be specified by the Appropriate Government.

When may the period for filing an appeal be extended?

Where the Appropriate Government or the appellate authority is satisfied that the appellant was prevented by sufficient cause from filing the appeal within sixty days.

By what maximum period may the time for filing an appeal be extended?

By a further period of sixty days.

What is the condition for admission of an employer's appeal under Section 7(7)?

The employer shall produce a certificate of the Controlling Authority that the required gratuity amount has been deposited or deposit such amount with the appellate authority at the time of filing the appeal.

What amount is required to be deposited by an employer before filing an appeal?

An amount equal to the gratuity required to be deposited under Section 7(4).

What powers does the Appropriate Government or the appellate authority have while deciding an appeal?

The Appropriate Government or the appellate authority may confirm, modify or reverse the decision of the Controlling Authority after giving the parties a reasonable opportunity of being heard.

What is the subject matter of Section 7A?

Inspectors.

Who may appoint Inspectors under Section 7A?

The Appropriate Government may appoint Inspectors.

How are Inspectors appointed under Section 7A(1)?

By notification.

For what purpose are Inspectors appointed under Section 7A?

For the purposes of this Act.

How may the Appropriate Government define the area of authority of an Inspector?

By general or special order.

Can the Appropriate Government distribute work among two or more Inspectors appointed for the same area?

The Appropriate Government may, by general or special order, provide for the distribution or allocation of work among them.

What is the legal status of an Inspector appointed under Section 7A?

Every Inspector is deemed to be a public servant within the meaning of Section 2(28) of the BNS.

What is the subject matter of Section 7B?

Powers of Inspectors.

For what purpose may an Inspector exercise powers under Section 7B?

To ascertain whether the provisions of this Act or the conditions of any exemption granted thereunder have been complied with.

Can an Inspector require an employer to furnish information?

An Inspector may require an employer to furnish such information as he considers necessary.

When may an Inspector enter and inspect premises under Section 7B?

At all reasonable hours.

Who may accompany an Inspector during inspection?

Such assistants, being persons in the service of the Government, local authority or any public authority, as the Inspector thinks fit.

Which premises may an Inspector enter and inspect under Section 7B?

Any premises or place in a factory, mine, oilfield, plantation, port, railway company, shop or other establishment to which this Act applies.

For what purpose may an Inspector inspect premises under Section 7B?

To examine registers, records, notices or other documents required to be kept or exhibited under this Act or otherwise kept in relation to employment or payment of gratuity and require their production.

Whom may an Inspector examine during an inspection?

The employer or any person found on the premises whom the Inspector has reasonable cause to believe is an employee employed therein.

What documents may an Inspector copy or extract under Section 7B?

Any register, record, notice or other document considered relevant.

When may an Inspector search and seize documents under Section 7B?

When he has reason to believe that an employer has committed an offence under this Act.

What documents may an Inspector search and seize?

Such register, record, notice or other document as he considers relevant to the offence.

What other powers may an Inspector exercise under Section 7B?

Such other powers as may be prescribed.

What is the obligation of a person required to produce documents or furnish information to an Inspector?

The person is legally bound to produce the documents or furnish the information within the meaning of Sections 210 and 211 of BNS.

Which provisions govern searches and seizures under Section 7B?

The provisions of the Bharatiya Nyaya Suraksha Sanhita, 2023 relating to searches and seizures under a warrant issued under Section 97, so far as may be.

What is the subject matter of Section 8?

Recovery of Gratuity.

When may the Controlling Authority issue a certificate for recovery of gratuity?

When the employer fails to pay the gratuity within the prescribed time to the person entitled thereto.

Who may apply for recovery of gratuity under Section 8?

The aggrieved person.

To whom does the Controlling Authority issue the recovery certificate?

The Collector.

What shall the Collector recover under Section 8?

The amount of gratuity together with compound interest from the date of expiry of the prescribed time.

At what rate is compound interest recoverable under Section 8?

At such rate as the Central Government may, by notification, specify.

How shall the Collector recover the gratuity amount and interest?

As arrears of land revenue.

To whom shall the Collector pay the recovered amount?

To the person entitled thereto.

What opportunity must be given to the employer before issuing a recovery certificate under Section 8?

A reasonable opportunity of showing cause against the issue of the certificate.

What is the maximum amount of interest recoverable under Section 8?

The amount of interest shall not exceed the amount of gratuity payable under this Act.

What is the subject matter of Section 9?

Penalties.

What is the punishment for knowingly making a false statement or false representation to avoid payment under the Act?

Imprisonment for a term which may extend to six months, or fine which may extend to ten thousand rupees, or both.

For what purpose must the false statement or false representation be made to attract punishment under Section 9(1)?

For avoiding any payment under this Act by oneself or enabling any other person to avoid such payment.

What is the punishment for an employer who contravenes or makes default in complying with the provisions of the Act or any rule or order made thereunder?

Imprisonment for a term of not less than three months but which may extend to one year, or fine of not less than ten thousand rupees but which may extend to twenty thousand rupees, or both.

What is the minimum imprisonment for non-payment of gratuity under the proviso to Section 9(2)?

Not less than six months.

What is the maximum imprisonment for non-payment of gratuity under the proviso to Section 9(2)?

Two years.

When may the Court impose a lesser term of imprisonment or only a fine for non-payment of gratuity?

When the Court, for reasons to be recorded in writing, is of the opinion that a lesser term of imprisonment or the imposition of a fine would meet the ends of justice.

What is the subject matter of Section 10?

Exemption of employer from liability in certain cases.

When is an employer entitled to seek exemption from liability under Section 10?

When the employer is charged with an offence punishable under this Act.

Whom may the employer have brought before the Court under Section 10?

Any other person whom the employer charges as the actual offender.

What notice must the employer give before seeking to have the actual offender brought before the Court?

Not less than three clear days' written notice to the complainant.

What must the employer prove to obtain exemption from liability under Section 10?

That he used due diligence to enforce the execution of the Act and that the actual offender committed the offence without his knowledge, consent or connivance.

What is the first condition for exemption of the employer under Section 10?

The employer must prove that he used due diligence to enforce the execution of the Act.

What is the second condition for exemption of the employer under Section 10?

The employer must prove that the offence was committed without his knowledge, consent or connivance.

What is the consequence if the employer proves the conditions specified in Section 10?

The actual offender shall be convicted and punished as if he were the employer, and the employer shall be discharged from liability for that offence.

Can the employer be examined on oath while proving his defence under Section 10?

The employer may be examined on oath.

Is the employer's evidence subject to cross-examination under Section 10?

The employer's evidence and that of his witnesses are subject to cross-examination by the person charged as the actual offender and by the prosecutor.

What shall the Court do if the person charged as the actual offender cannot be brought before it?

The Court shall adjourn the hearing from time to time for a period not exceeding three months.

What shall the Court do if the actual offender cannot be brought before it even after three months?

The Court shall proceed to hear the charge against the employer and, if the offence is proved, convict the employer.

What is the subject matter of Section 11?

Cognizance of Offence.

On whose complaint can a Court take cognizance of an offence under the Payment of Gratuity Act?

Only on a complaint made by or under the authority of the Appropriate Government.

When shall the Appropriate Government authorise the Controlling Authority to make a complaint against the employer?

Where the amount of gratuity has not been paid or recovered within six months from the expiry of the prescribed time.

Within what period shall the Controlling Authority make a complaint after receiving authorisation?

Within fifteen days from the date of authorisation.

To whom shall the Controlling Authority make the complaint under Section 11?

To a Magistrate having jurisdiction to try the offence.

Which is the minimum Court competent to try offences under the Payment of Gratuity Act?

A Metropolitan Magistrate or a Judicial Magistrate of the First Class.

Can a Court inferior to a Metropolitan Magistrate or Judicial Magistrate First Class try offences under this Act?

No, a Court inferior to a Metropolitan Magistrate or a Judicial Magistrate of the First Class shall not try any offence punishable under this Act.

What is the subject matter of Section 12?

Protection of action taken in good faith.

Against whom is protection available under Section 12?

The Controlling Authority or any other person.

In respect of what actions is protection granted under Section 12?

Anything done or intended to be done in good faith under this Act or any rule or order made thereunder.

Can any suit or legal proceeding lie against the Controlling Authority for acts done in good faith under this Act?

No, no suit or other legal proceeding shall lie.

What is the subject matter of Section 13?

Protection of gratuity.

Is gratuity payable under the Payment of Gratuity Act liable to attachment?

No, gratuity payable under this Act is not liable to attachment.

Is gratuity payable to employees of establishments exempted under Section 5 liable to attachment?

No, gratuity payable to employees of establishments exempted under Section 5 is not liable to attachment.

In execution of whose decrees or orders is gratuity protected from attachment?

Decrees or orders of any civil, revenue or criminal court.

What is the subject matter of Section 13A?

Validation of payment of gratuity.

For what period does Section 13A validate payment of gratuity?

From 3 April 1997 until the date on which the Payment of Gratuity (Amendment) Act, 2009 received the assent of the President.

Under which notification is gratuity validated by Section 13A?

Government of India, Ministry of Labour and Employment Notification No. S.O. 1080 dated 3 April 1997.

What is the legal effect of the notification validated under Section 13A?

It shall be valid and deemed always to have been valid as if the Payment of Gratuity (Amendment) Act, 2009 had been in force at all material times.

Does Section 13A impose punishment or penalty for non-payment of gratuity during the validation period?

No, nothing in Section 13A affects any person with any punishment or penalty for non-payment of gratuity during that period.

What is the subject matter of Section 14?

Act to override other enactments, etc.

What is the overriding effect of Section 14?

The provisions of this Act and the rules made thereunder prevail over anything inconsistent contained in any other enactment or any instrument or contract having effect by virtue of such enactment.

What is the subject matter of Section 15?

Power to make rules.

Who may make rules under Section 15?

The Appropriate Government.

How are rules made under Section 15?

By notification.

For what purpose may rules be made under Section 15?

For carrying out the provisions of this Act.

Before whom shall every rule made by the Central Government be laid?

Before each House of Parliament.

For what total period must rules be laid before Parliament?

Thirty days, whether comprised in one session or in two or more successive sessions.

What may Parliament do with rules laid under Section 15(2)?

Both Houses may agree to modify the rule or agree that the rule should not be made.

What is the effect if both Houses modify or annul a rule under Section 15(2)?

The rule shall thereafter have effect only in the modified form or be of no effect, as the case may be.

Does modification or annulment of a rule affect actions already taken under it?

No, it does not prejudice the validity of anything previously done under that rule.