Abstract of the Payment of Gratuity Act, 1972 (39 of 1972) and the Kerala Payment of Gratuity
FORM ‘U’
See Rule 20
Abstract of the Payment of Gratuity Act, 1972 (39 of 1972) and The Kerala Payment of Gratuity Rules 1973 to whom the Act Applies:
The Act applies to every factory, mine, oilfield, plantation, Port, Railway, Company, every shops and establishments within the meaning of any law for the time, being in force in relation to shops and establishments in the State, in which ten or more persons are employed, or were employed, on any day of the preceding twelve months and such other establishments or class of establishments, in which ten or more employees are employed, or were employed, on any day of preceding twelve months, as the Central Government may, by notification, specify in this behalf.
Definitions:
(i)“Appropriate Government” means:-
Central Government in relation to an establishment.—
(a)belonging to or under the control of the Central Government.
(b)having branches in more than one State.
(c)of a factory belonging to, or under the control of the Central Government.
(d)major port, mine, oil fields or railway company, Central Government: in any other case, the State Government.
(ii)“Completed year of service” means continuous service for one year.
(iii) “Continuous Service” means uninterrupted service and includes service which is interrupted by sickness, accident, leave, lay off, strike or lock-out cessation of work not due to any fault of the employee concerned, whether such un-interrupted or interrupted service was rendered before or after the commencement of this Act.
(iv) “Controlling Authority” means an authority appointed by the appropriate Government under Section 3 of the Act (District Labour Officers)
(v) “Appellate4 authority” means the State Government or the authority specified by the State Government under sub-section (7) of Section of the Act. (Deputy Labour Commissioners.)
Conditions of Payment of Gratuity and rate of Gratuity
Gratuity shall be payable to an employee on his superannuation, or retirement or resignation or on his death or disablement due to accident/disease, after completion of five continuous service. In the case of termination of the employment due to death or disablement, completion of a continuous service of five years shall not be necessary.
In the case of death of the employee, gratuity payable to him shall be paid to his nominee or to his heirs if no nomination has been made.
The employer shall pay gratuity to an employee at the rate of fifteen days wages based on the rate of wage last drawn by the employee concerned, for every completed year service of part thereof in excess of six months. The amount payable to an employee shall not exceed one Lakh rupees. Gratuity at the rate of seven days wages for each season shall be payable to an employee employed in a seasonal establishment. An employee has right to receiveor better terms of gratuity under any award or agreement or contract with the employer.
Nomination
Each employee who has completed one year pf service shall make nomination in the prescribed form in duplicate in Form F and within the time limit (within 90 days of the commencement of the Kerala payment of Gratuity Rules, 1973 in the case of an employee who has completed 1 year of service of before the commencement of these rules, and within 30 days of the completion of one year of service in the case of an employee who completes one year of service after the commencement of these rules) for the purpose of payment of gratuity to his/her nominees in the case of his/her death.
Any nomination made by an employee having a family at the time of making a nomination in favour of a person who is not a member of his family shall be void. The nomination shall be made in favour of one or more members of his family.
In the case of an employee who has no family at the time of making a nomination, the nomination may be made in favour of any person or persons. But if the employee subsequently acquires a family, such nomination shall become invalid and the employee shall make a fresh nomination in Form G (duplicate) within 90 days of acquiring family.
If an employer refuses to accept a nomination the claimant employee, nominee or legal heir, as the case may be, may apply in form ‘N’ to the Controlling Authority within 90 days of the occurrence of the cause for the application, for issuing direction.
A notice of modification of a nomination including cases where a nominee predeceases an employee shall be induplicate in Form ‘H’.
A nomination, a fresh nomination or a notice of modification of nomination shall take effect from the date of receipt thereof by the employer.
Application for Gratuity
A person who is eligible for payment of gratuity under the Payment of Gratuity Act, 1972 or any person authorised in writing to act on his behalf, shall apply to the employer in Form ‘I’ within 30 days from from the date the gratuity becomes payable.
In the case of superaccuation or retirement, application shall be made before thirty days of the date of superannuation or retirement.
A nominee of an employee who is eligible for payment of gratuity shall apply in Form “J” to the employer within 30 days from the date the gratuity becomes payable to him. Application in plain paper with relevant particulars may also be submitted.
A legal heir of an employee who is eligible for payment of gratuity shall apply in Form “K” to the employer within one year from the date, the gratuity becomes payable.
No claim or gratuity under the Act shall be invalid merely because the claimant failed to present his application within the specified period.
The employer shall arrange to pay the amount of gratuity to the person to whom the gratuity is payable within the prescribed time.
Disposal of Dispute as to the amount of gratuity payable
If there is any dispute as to—
(i)the amount of gratuity payable to an employee under this Act;
(ii)the admissibility of any claim of, or in relation to, an employee for payment of gratuity.
(iii)the persons entitled to receive the gratuity, the employer shall deposit with the controlling authority such amount as he admits to be payable by him as gratuity.
The employee may make an application in form “N” within the prescribed time to the controlling authority for taking necessary action on the dispute with regard to any matter mentioned above.
The controlling authority shall, after due enquiry and after giving the parties to the dispute a reasonable opportunity of being heard, record his finding as to whether any amount is payable to the applicant under the Act. A copy of the finding shall be made available to each of the parties. If any amount in excess of the amount deposited by the employer is found to be payable, the controlling authority shall direct the employer to pay such amount in excess of the amount deposited by him.
The controlling authority shall pay the amount deposited by the employer to the person entitled to thereto.
I a finding is recorded by the controlling authority that the applicant is entitled to payment of gratuity under the Act and there it no amount deposited by the employer, the controlling authority shall issue a notice to the employer concerned in Form “R” specifying the amount payable and directing payment thereof to the applicant under intimation to the controlling authority within 30 days from the date of receipt of the notice by the employer.
A copy of the notice shall be supplied to the applicant employee, nominee or legal heir, as the case may be.
Appeal against the orders of Controlling Authority
Any person aggrieved by an order of controlling authority for payment of gratuity may within sixty days from the date of the receipt of the order prefer a memorandum of appeal with necessary document to the Appropriate Government or the Appellate Authority (Deputy Labour Commissioners) with a copy thereof to the opposite party ad controlling authority. The time limit to prefer appeal may extend to a further period of 60 days if there is sufficient reasons.
The Appellate Authority may after giving the parties to the appeal a reasonable opportunity of being heard, confirm, modify or reverse the decision of the controlling authority.
If the Controlling Authority has direction in the decision of the Appellate Authority to modify his order for payment of gratuity, he shall issue a notice (Form S) to the employer conce4rned specifying the modified amount payable and directing payment thereof to the applicant under intimation to the controlling authority within 15 days of the receipt of the notice by the employer.
Notice for Payment of Gratuity by Employer
The employer shall determine the amount of gratuity as soon as gratuity become payable and give notice in Form “L” in writing, to the person to whom the gratuity is payable and also to controlling authority specifying the amount of gratuity as determined.
Mode of Payment of Gratuity
The gratuity shall be paid in cash or, if so desired by the payee, in demand draft or bank cheque to the eligible employee, nominee or legal heirs, as the case may be.
Payment may be made by postal money order if the amount of gratuity payable is lee than Rs. 1,000 and the payee so desires.
The details of the payment shall be intimated to the controlling authority of the area by the employers.
Recovery of Gratuity
If any amount of gratuity payable to a person in due from an employer the controlling authority shall, on an application made by the aggrieved person in this behalf, issue a certificate for that amount to the concerned Collector who shall recover the same as arrears of land revenue and pay the same to the person entitled thereto.
Penalties for offences under the Act
Making of any false statement or false representation for the purpose of avoiding any payment under the Act or enabling any other person to avoid payment under the Act shall be punishable with imprisonment for a term which may extend to six months or with fine which may extend to one thousand rupees, or with both.
An employer, who makes default in complying with the provisions of the Act any rule or order made thereunder shall be punishable with imprisonment for a term which may extend to 1 year or with fine which may extend to Rs. 1,000 or with both.
Non-payment of any gratuity payable under the Act is punishable with imprisonment for a term which shall not be less than 3 months unless the court trying the offence otherwise orders.
Protection of Gratuity
Gratuity payable under the payment of Gratuity Act 1972 (Central Act 39 of 1972) shall not be liable to any attachment.