1. What is gratuity?
Gratuity is a statutory payment to be made by an employer to an employee rendering five or more years of continuous service in an establishment.
2. To which organization gratuity is applicable?
It applies to every factory, mine, oil field, plantation, port and railway company, every shop or establishment with 10 or more persons employed.
3. Who is eligible for gratuity ?
An employee on his termination of employment after he has rendered continuous service for not less than 5 years
a) on his superannuation or
b) on his retirement or his resignation or
c) on his death or disablement due to accident or disease. Completion of continuous service of 5 years is not necessary where termination is due to death or disablement.
4. Whether the Act shall continue to be applicable to Shop or Establishment even after the prescribed number of workmen has been reduced?
Yes. Once the Act becomes applicable, it shall continue to be applied not withstanding the number of persons employed falls below ten.
5. Whether gratuity is applicable to seasonal employment?
The employer shall pay the gratuity at the rate of 7 days wages per each season.
6. What are the components of wages to be taken for calculation of gratuity?
All emoluments which are earned by an employee while on duty or on leave in accordance with the terms and conditions of the employment and which are paid or payable to him in cash and includes dearness allowance but does not include any bonus, commission, house rent allowance, overtime wages and any other allowance.
7. What is continuous service for calculation of gratuity?
Uninterrupted service, including service which maybe interrupted on account of sickness, accident, leave, absence from duty without leave (not being absence in respect of which an order treating the absence as break in service has been passed in accordance with the standing orders), lay-off, strike, or a lock-out or cessation of work not due to any fault of the employee – 190 days of actual work in a calendar year if the employee is employed below the ground in a mine or 240 days in any other case. For the period of 6 months if an employee has actually worked under the employer for not less than 95 days in a underground mine and 120 days in any other case. In case of seasonal establishments if the employee has actually worked for not less than 75% of the number of days on which the establishment was in operation.
8. To whom the worker has to be applied for gratuity?
The worker shall apply to the employer for payment of gratuity. If the employer does not pay the workman can file his claim before the Controlling Authority under the Gratuity Act. The Asst. Commissioner of Labour is the Controlling Authority under the Payment of Gratuity Act.
9. When the gratuity shall be payable for the employee ?(Sec.-4)
Within 30 days of termination of the employment of the employee.
10. How the gratuity is calculated ?
Basic wages + Dearness Allowance divided by 26 x 15 x no. of years of service.
11. What is the maximum amount of ceiling on payment of gratuity?
Rs.10 lacs.
12. Whether gratuity is payable to workman whose services are terminated on mis-conduct ?
Yes. However, gratuity may be wholly or partially forfeited if the services of an employee are terminated for his riotous or disorderly conduct or any other act of violence on his part or any act which constitutes an offence involving moral turpitude provided such offence is committed in the course of employment.
13. How to make an application before Controlling Authority ?
The application shall be filed before the Controlling Authority under the payment of Gratuity Act, 1972 in Form ‘N’.
14. What is the time limit to pay the gratuity when it is payable ?
Within 30 days of termination of the employment of the employee.
15. What is the appeal time and who is the Appellate Authority?
The appeal time is 60 days from the date of receipt of the order of the Controlling Authority. The Dy. Commissioner of Labour is the Apellate Authority u/s. 7 of the Payment of Gratuity Act.
16. How to recover the gratuity from the employer ?
The Gratuity shall be recoverable under the Revenue Recovery Act.
17 Can the amount of gratuity be attached in executing any decree or order of any Civil, Revenue or Criminal court.?
No. No gratuity shall be liable to attachment in executing or any decree or order of any civil, revenue or criminal court.
18. How to make nomination by the worker.?
The nomination shall be made in Form ‘F’ by am employee who has completed one year of service and submit to the employer.
