The PAYMENT OF GRATUITY ACT, 1972

1972 · State unknown · central · act_text

Sections (62)

1 · Short title, extent, application and commencement - (1) This Act may be called the Payment of Gratuity Act,1972.

1 · [(3A) A shop or establishment to which this Act has become applicable shall continue to be governed by this Act notwithstanding that the number of persons employed therein at any time after it has become so applicable falls below ten. ]

1 · Ins. by Act 26 of 1984, sec.2

2 · Came into force on 16-9-1972, vide S.O.601 (E), dated 16th September, 1972, published in the Gazette of India, Extra., Pt. II, Sec. 3(ii), p. 1641.

2 · Definitions - In this Act, unless the context otherwise requires,-

1 · [(c) "continuous service" means continuous service as defined in section 2A;]

1 · Subs by Act 26 of 1984, sec.3, for clause (c) (w.r.e.f. 11-12-1981).

2 · Certain words omitted by Act 34 of 1994, sec.2 (w.e.f. 24-5-1994).

3 · Subs. by Act 25 of 1984, sec.2, for certain words (w.e.f. 1-7-1984).

4 · Explanation omitted by Act 34 of 1994, sec.2 (w.e.f. 24-5-1994).

2 · [* * *] (g) "factory" has the meaning assigned to it in clause (m) of section 2 of the Factories Act, 1948 (63 of 1948); (h) "family" in relation to an employee, shall be deemed to consist of(i) in the case of a male employee, himself, his wife, his children, whether married or unmarried, his dependent parents 1 [ and the dependent parents of his wife and the widow] and children of his predeceased son, if any, (ii) in the case of a female employee, herself, her husband, her children, 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, Explanation.- 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 include in his family, and 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 the employee; (i) "major port" has the meaning assigned to it in clause (8) of section 3 of the Indian Ports Act, 1908 (15 of 1908); (j) "mine" has the meaning assigned to it in clause (j) of sub-section (1) of section 2 of the Mines Act, 1952 (35 of 1952); (k) "notification" means a notification published in the Official Gazette; (l) "oilfield" has the meaning assigned to it in clause (e) of section 3 of the Oilfields (Regulation and Development) Act, 1948 (53 of 1948); (m) "plantation" has the meaning assigned to it in clause (f) of section 2 of the Plantation Labour Act, 1951 (69 of 1951); (n) "port" has the meaning assigned to it in clause (4) of section 3 of the Indian Ports Act, 1908 (15 of 1908); (o) "prescribed" means prescribed by rules made under this Act; (p) "railway company" has the meaning assigned to it in clause (5) of section 3 of the Indian rail ways Act, 1890 (9 of 1890); (q) "retirement" means termination of the service of an employee otherwise than on superannuation; [(r) "superannuation", in relation to an employee, means the attainment by the employee of such age as is fixed in the contract and conditions of service as the age on the attainment of which

3 · the employer shall vacate the employment;]

1 · Subs. by Act 22 of 1987, sec. 2, for “and the widow” (w.e.f. 1-10-987).

2 · The proviso omitted by Act 22 of 1987, sec. 2 (w.e.f. 1-10-1987).

3 · Subs. by Act 25 of 1984, sec.2, for clause (r) (w.e.f. 1-7-1984).

1 · [2A Continuous service.- For the purposes of this Act,-

1 · Ins. by Act 26 of 1984, sec.4 (w.r.e.f. 11-12-1981)

2 · The words “imposing a punishment or penalty or” omitted by Act 22 of 1987, se.3 (w.e.f. 1-10-1987).

1 · [ Explanation.- For the purposes of clause (2) number of days on which an employee has actually worked under an employer shall include the 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 (20 of 1946), or under the Industrial Disputes Act, 1947 (14 of 1947), or under any other law applicable to the establishment;

3 · Controlling authority.- The Appropriate Government may, by notification, appoint any officer to be a controlling authority, who shall be responsible for the administration of this Act and different authorities may be appointed for different areas.

4 · Payment of gratuity.- (1) Gratuity shall be payable to an employee on the termination of his employment after he has rendered continuous service for not less than five years,-

1 · Added by Act 22 of 1987, sec.3 (w.e.f. 1-10-1987).

1 · Subs. by Act 22 of 1987, sec. 4 (w.e.f. 2-2-1991).

2 · Subs. by Act 25 of 1984, sec. 3 for "an employee employed in a seasonal establishment"(w.e.f. 1-7-1984). 3. Ins. by Act 22 of 1987, sec. 4 (w.e.f. 1-10-1987).

4 · Subs. by Act 11 of 1998, sec. 2, for “one lakh”.

2 · [* * *]

1 · Sub. by Act 25 of 1984, sec.3, for “shall be wholly forfeited (w.e.f.1-7-1984).

2 · Sub- section (7) ins. by Act 25 of 1984, sec.3 and omitted by Act 34 of 1994 (w.e.f. 24-5-1994).

1 · [4A compulsory insurance.- (1) with effect from such date as may be notified by the appropriate Government in this behalf, every employer, other than an employer or an establishment belong- ing to, or under the control of the Central Government or a State Government, shall, subject to the provisions of sub-section (2), obtain an insurance in the manner prescribed, for his liability for payments toward the gratuity under this Act, from the Life Insurance Corporation of India established under the Life Insurance Company of India Act, 1956 (31 of 1956) or any other prescribed insurer:

1 · Ins. by Act 22 of 1987, sec. 5 (w.e.f. date to be notified).

5 · Power to exempt.1 [(1)] The appropriate Government may, by notification, and subject to such conditions as may be specified in the notification, exempt 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, the employees in such establishments factory, mine, oilfield, plantation, port, railway company or shop are in receipt of gratuity or pensionary benefits not less favourable than the benefits conferred under this Act.

2 · [(2)] The appropriate Government may, by notification and subject to such conditions as may be specified in the notification, exempt any employee or class of employees employed in 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, such employee or class of employees are in receipt of gratuity or pensionary benefits not less favourable than the benefits conferred under this Act.]

3 · [(3) A notification issued under sub-section (1) or sub-section (2) may be issued retrospectively a date not earlier than the date of commencement of this Act, but no such notification shall be issued so as to prejudicially, affect the interests of any person.]

6 · Nomination.- (1) Each employee, who has completed one year of service, shall make, within such time, in such form and in such manner, as may be prescribed, nomination for the purpose of the second proviso to sub-section (1) of section 4.

7 · Determination of the amount of gratuity. -(1) A person who is eligible for payment of gratuity under this Act or any person authorised, in writing to act o his

1 · Section 5 renumbered as sub- section (1) thereof by Act 26 of 1984, sec. 5.

2 · Ins. by Act 26 of 1984, sec.5.

3 · Ins by Act 22 of 1987, sec. 6 (w.e.f. 1-10-1987).

1 · [(3) The employer shall arrange to pay the amount of gratuity with in thirty days from the date it becomes payable to the person to whom the gratuity is payable.

3 · [(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 con- trolling authority for deciding the dispute.]

4 · [(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 of 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.]

5 · [(d)] The controlling authority shall pay the amount deposited, including the excess amount, if any, deposited by the employer, to the person entitled thereto.

5 · [(e)] As soon as may be after a deposit is made under clause(a), the controlling authority shall pay the amount of the deposit-

1 · . Subs by Act 22 of 1987, sec.7, for sub-section (3) (w.e.f. 1-10-1987).

2 · The Explanation omitted by Act 25 of 1984, sec.4 (w.e.f. 1-7-1984). 3. Ins. by Act 25 of 1984, sec.4, (w.e.f. 1-7-1984).

4 · Subs. by Act 25 of 1984, sec.4, for clause (c) as re-lettered by that section (w.e.f. 1-7-1984).

5 · Clause (c) and (d) re-lettered as clauses (d) and (e) by Act 25 of 1984, sec. 4 (w.e.f.1-7-1984). 6. Subs. by Act 25 of 1984, sec.4, "nominee or" (w.e.f. 1-7-1984).

1 · [Provide further no appeal by an employer shall be admitted unless at the time of preferring the appeal, the appellant either produces a certificate of the controlling authority to the effect that the appellant has deposited with him an amount equal to the amount of gratuity required to be deposited under sub-section (4), or deposits with the appellate authority such amount.]

1 · Ins. by Act 25 of 1984, sec.4, (w.e.f. 1-7-1984).

7B · Powers of Inspectors.- (1) Subject to any rules made by the appropriate Government in this behalf, an Inspector may, for the purpose of ascertaining whether any of the provisions of this Act or the conditions, if any, of any exemption granted thereunder, have been complied with, exercise all or any of the following powers, namely:-

8 · Recovery of gratuity.- If the amount of gratuity payable under this Act is not paid by the employer, within the prescribed time, to the person entitled thereto, the controlling authority shall, on an application made to it in this behalf by the aggrieved person issue a certificate that amount to the Collector who recover the same, together with compound interest thereon 1[at such rate as the central Government may,

1 · Subs. by Act 22 of 1987, sec.8, for “at the rate of 9 percent per annum” (w.e.f. 1-10-1987).

9 · Penalties.- (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 2[ten thousand rupees] or with both.

10 · Exemption of employer from liability in certain cases.- 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 day's 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 of the certification of the court-

2 · Subs by Act 22 of 1987, sec.9, for “one thousand rupees” (w.e.f. 1-10-1987).

3 · Subs by Act 22 of 1987, sec.9, for “certain words” (w.e.f. 1-10-1987).

11 · Cognizance of offence.- (1) No court shall take cognizance of any offence punishable under this Act save on a complaint made by or under the authority of the appropriate Government:

12 · Protection of action taken in good faith.- No suit or other legal proceeding shall lie against the controlling authority or any other person in respect of anything which is in good faith done or intended to be done under this Act or any rule or order made thereunder.

13 · Protection of gratuity.- No gratuity payable under this Act 2[and no gratuity payable to an employee employed in any establishment, factory, mine, oilfield, plantation, port, railway company or shop exempted under section 5] shall be liable to attachment in execution of any decree or under of any civil, revenue or criminal court.

14 · Act to override other enactments, etc. - The provision of this Act or any rule made thereunder shall have effect notwithstanding anything inconsistent therewith contained in any enactment other than this Act or in any instrument or contract having effect by virtue of any enactment other than this Act.

1 · Subs. by Act 34 of 1994, sec.4, for “presidency Magistrate or a Magistrate of the first class” (w.e.f. 24-5-1994).

15 · Power to make rules. - (1) The appropriate Government may, by notification, make rules for the purpose of carrying out the provisions of this Act.

The PAYMENT OF GRATUITY ACT, 1972

Sections (62)

Subordinates (0)