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The Payment Of Gratuity Act, 1972
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| Applicability |
Every factory, mine, oilfield, plantation, port, railways, company, shop, establishment or educational institutions employing 10 or
more persons |
| Sec. 1 |
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| Wages for Calculation |
@15 days' wages for every completed year as if the month comprises of 26 days at the last drawn wages |
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| Sec. 2(s) |
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| Calculation Place-rated employee |
@ 15 days' wages for every completed year on an average of 3 months' wages |
| Sec. 4 |
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| Calculation Seasonal employee |
@ 7 days' wages for every completed year of service |
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| Sec. 4 |
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| Employee |
| All employees Irrespective of status or salary |
| Sec. 2(e) |
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| Entitlement |
| On completion of five years' service except in case of death or disablement |
| Sec. 2(e) |
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| Qualifying period |
| On rendering of 5 years' service, either termination, resignation or retirement |
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| Sec. 2(e) |
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| Display of Notice |
| On conspicuous place at the main entrance in English language or the language understood by majority of employees of property, etc |
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| Rule 4 |
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| Nomination |
| To be obtained by employer after expiry of one year's service, in Form F |
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| Sec. 6, Rule 6 |
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| Total Celling |
| Rs. 3,50,000 |
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| Sec. 4(3) |
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| Mode of Payment |
| Cash or, if so desired, by Bank Draft or Cheque |
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| Rule 9 |
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| Recovery of Gratuity |
| To apply within 30 days in Form I when not paid within 30 days |
| Sec. 8, Rule 8 |
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| Forfeiture of Gratuity |
• On termination of an employee for moral turpitude and riotous or disorderly behaviour
• Wholly or partially for wilfully causing loss, destruction of property,etc |
| Sec. 4(6) |
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| Protection of Gratuity |
| Can not be attached in execution of any decree |
| Sec. 13 |
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| Penalties |
• Imprisonment for 6 months or fine upto Rs.10,000 for avoiding to make payment by making false statement or representation
• Imprisonment not less than 3 months and upto one year with fine on default in complying with the provisions of Act or Rules. |
| Sec. 9 |
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