Payment of Gratuity payment og gratuity act by Act ROHAN

7/28/2019 Payment of Gratuity payment og gratuity act by Act ROHAN

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Payment of GratuityAct, 1972


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Concept of Social Security

A protection for self and / ordependants against LOSS OFINCOME andUNDESIRED WANTS

due toun-employmentIncapacity to work because of ----Invalidity or infirmity PERMANENTOR TEMPORARY

Old age


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Gratuity- A Gracious payment to

statutory right. .

Sec. 13. Protection of gratuity:No gratuity payable under the Act

shall be liable to attachment in

execution of any decree or order of

any civil, revenue or criminal court.

Gratuity to an employee cannot be

attached by the Court.-G. Narayana Rao v V. R. Nagimani,

1997 Lab IC 902 (Kant)


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Attachment of gratuity to

dependants. In view of provisions

of S. 60(1)(g) of CPC and also S.4(1) read with 13 of PGA, gratuity

payable under the Act to legal

representative of deceased Govtemployee does not lose its

character and is not liable to

attachment in execution of any

decree of civil court.

D. Vimala v Canara Bank, (1980) 1

Cur LR 228 (AP)


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Appropriate Government. 2(a)

Central Govt. -

1. Establishment Belonging to or underthe control of Central Govt.(+ 10

employees)2. Establishment Having branches in

more than one state. It is differentfrom Factories.

3. Factory belonging to or under thecontrol of the Central Govt.

4. Major Port, Mine, Oil field or Railwaycompany

State Government -In other all cases,


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The Central Government is the

appropriate Government only in

relations to an establishment

having branches in more than one

State. There is no like provision

in relation to such anestablishment having factories in

different States-

Jeewanlal Ltd v AppellateAuthority, (1984) 4 SCC 356:

1984 SCC (L&S) 753.


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Who is eligible to claim gratuity?

EMPLOYEE Sec. 2(e). (Other than anapprentice. Includes Manager/ Supervisors)

Does not include a Govt. servant

who is governed by any other Act orby any rules providing for payment of

gratuity.

PERFORMING -

Skilled, Semi & Un-Skilled, Manual,

Supervisory, Technical, Clerical

Work.

NO SALARY LIMIT w.e.f. 26 Nov 92.

A t i t id th A ti A t


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A trainee outside the Apprentices Act,q961 is covered by the definition of

employee.

Orissa Mining Corporation Ltd v

Controlling Authority under PGA,

(1994) 2 LLN 1130: (1995) 1 LLJ 381

(Ori)

House worker not working in any

establishment would be an employee

under the Act. .

Bagi Beedi Factory v AppellateAuthority under PGA, (1998) 1 LLN

582: (1998) 93 FJR 416


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Establishment not defined: Shops,

hotels, temples, municipal

boards, Cantonment Boards,

Electricity Boards, Educational

Institutions, Motor Transports,

Clubs, Trusts & Societiesregistered under the Societies

Registration Act, 1860

Condition:Ten or more employeesand not persons in any ;


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Time limit for payment ofGratuity: Thirty days.

An employee, if his date ofsuper-annuation is known canapply 30 days before his

retirement.


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How to calculate Gratuity ?

1. Max. gratuity : Rs. 3.5 Lakhs [u/s (3)]w.e.f. 1998 (Wage = Basic + DA)

How to calculate gratuity

Wage/26 x 15 x No of completed yearOf service

No. of days for which gratuity is to be

paid on rendering one year service Seasonal Estb. : 7 days

Others : 15 days


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Forfeiture of gratuity S. 4(6)(b)

Wholly or PartiallyIf employee isterminated for

1. Riotous or Disorderly conduct2. Any other act of violence

3. An offence involving moral turpitude,

committed in the course of employment.


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Forfeiture to the extent of

damage/loss . Sec. 4(6)(a)

If terminated for any act, willful

omission or negligence causing

any damage/ loss/ destruction tothe property of employer

Before forfeiture, the disciplinaryproceedings should quantify the

loss or damage.-D.V.Kapoor v

UOI, 1990(4) SCC 314.


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If a workman is guilty of a

serious misconduct such as actsof violence against mgt or other

employees or riotous or

disorderly behavior in or near theplace of employment, which

though not directly causing

damage, is conducive of grave

indiscipline, then his gratuity can

be forfeited in its entirety. (1973)

2 SCC 502; 1973 SCC L&S 570.


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Gratuity of an employee cannot

be withheld even if disciplinary

proceeding is pending againsthim. B.L. Gopalakrishna v KarnatakaSoap & Detergents Ltd, 1996 Lab IC

140 (Kant). .

Gratuity of an employee

dismissed for slow-down of work

cannot be withheld since there isno such bar in the Act. Permali

Wallance Ltd v State of M.P.

(1996) 2 LLJ 515 (MP)


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Rightful claim of gratuity cannot

be defeated on the ground of

technicality such as limitation.Controlling Authority has

condoned the delay and High

Court in writ jurisdiction cannot

interfere with said finding of theauthority.

Mineral Area DevelopmentAuthority v State of Bihar, (1988)

3 LLN 484 (Pat)


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Damages for occupying

quarter cannot be withheld

from gratuity .

Rajender Pai H v Canara

Bank, (1998)1 LLJ 577 (Ker)

Gratuity cannot be withheld

for not vacating the

companys quarter .

Madan Mohan Laik v Voal

India Ltd, 1997 Lab IC 240

(Cal)


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When an employee is entitled ? S. 4

1. On superannuations

2. On retirement

3. On resignation

4. On death

5. On disablement

Compulsory premature retirementchallenged in Court can not be a

ground for with holding of gratuity post retiral benefit

Brundban Sahu V Orissa SRTC Ltd. 1992Lab IC 1335 (Ori)

Retirement includes retrenchment.

If rendered 5 yrs.Continuous service

Not applicable


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Continuous service: Sec. S-A.

Includes absence on account of publicholidays, weekly holidays, sickness,

maternity leave, accident, leave,

absence without leave in absence of

an order treating that absence asbreak in service in accordance with

standing Orders/ rules/ regulations;

Lay-off, strike or lock-out or cessation

of work not due to any fault of theemployee

240 days / 190 day below ground in a

mine in preceding 12 calendar months


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Process of claiming gratuity. S. 7

Application to be made to employer

Employer to determine the gratuity andinform person as well as the controlling

officer. Employer to pay gratuity within 30 days

from the date it becomes payable.

If delay, the employer to pay simpleinterest from the date it became payable

In case of dispute, the employer has todeposit the admitted amount with CA


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Controlling Authority appointed U/s

3 Appellate Authority appointed U/s7(7), 7(8)

Inspector U/s 7A. w.e.f. 01.07.84

C.A. can award compound intereston delayed payment at such rate asspecified by Central Govt.

Interest can not be more thanamount of gratuity.


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Condonation of delay before Controlling Authority Rule 10 90 days of concurrence of cause

The Controlling Authority may accept anyapplication under this sub-rule, onsufficient cause being shown by the

applicant, after the expiry of the specifiedperiod.

Natraja Pillai V Regional Joint Labour

Commissioner & Ors, 1993 I LLJ 674 (HP)Whether it was mandatory to file Separateapplication for condonation of delay


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Condonation of delay in appeal

Period of appeal 60 days

Max. condonation

60 days

Appellate Authority can not condon beyond120 days.

Western Coalfields Ltd. V Cont. Authority

under PGA, Jabalpur : 2000 Lab IC 3458 (MP) Rules prescribing for limitation are only

procedural and do not intend to extinguishright of employees. Moreover when employer

has benefited from money belonging toemployees. He can not resist claim ontechnical plea of limitation.

P. Rama Rao V Cont. Authority & ALC(C),

Vijayawada & Ors., 1996 Lab IC 2765 (AP)

S. 7(7)


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Appellate Authority has

powers to remand the matterto the Controlling Authority

for fresh disposal.

East India Company Ltd vAppellate Authority under

Payment of Gratuity Act,

(1993) 1 LLN 831 (AP)


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Central/State Govt employees

are not governed by PGA,

The President has no powers

to withhold gratuity of a

employee after his retirementas a measure of punishment.

Gratuity is also a statutory

right.D.V.Kapoor v UOI, 1990 (4)

SCC 314


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Questions, if any

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Payment of Gratuity payment og gratuity act by Act ROHAN

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