Payment of Gratuity Act, 1972

  • Assessing the applicability of the enactment
  • Preparation of notice of opening
  • Advising on gratuity trust and its formation
  • Advising on obtaining gratuity policy
  • Advising on preparation of various notices, abstracts etc.

Enactments


Brief detail of the enactment
  • An employee expects and deserves, as a matter of right, some reward when he retires after a long meritorious service. The enactment of the Payment of Gratuity Act, 1972 has fulfilled this expectation of an employee. Under the Act an employee becomes entitled to earn gratuity after putting in continues service of minimum five years (except in death and disablement due to accident / disease). When employee dies while in service his nominee or heirs are entitled to get gratuity even if the employee had put in less than 5 years’ service. The amount of gratuity is restricted to Ten Lakhs rupees
Applicability
  • Every factory as define in factories Act
  • Every shop or commercial establishment in which 10 or more persons are employed
  • Gratuity is payable on the basis of last drawn salary
Requirements
  • Notice of opening need to be submitted
  • Nomination form need to be obtained
  • It is advisable to have gratuity policy
  • Abstract and other notices need to be displayed on the notice board
Consequences
  • Payment of gratuity to employees is compulsory, employee can apply / appeal to authorities

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