This Act provides for a scheme for the payment of Gratuity to employees engaged in Factories, Mines, Oil Fields, Plantations, Ports, Railway Companies, Shops or other establishments and for matters connected there with or incidental thereto.
This Act applies to (a) every Factory, Mine, Oil fields, Plantations, Ports and Railway Companies, (b) every Shop or Establishment in which 10 or more persons are employed or where employed on any day of the preceding 12 months. Once the Act becomes applicable to a Shop or Establishment, it shall continue to apply even if, at any time, the number of employees employed therein falls below 10.
This Act provides for Payment of Gratuity to the employee on the termination of his employment after he has rendered continuous service for not less than 5 years. The Condition of completion of continuous service of 5 years shall not be necessary where the termination of the employment of any employee is due to death or disablement. Normally, the Gratuity is payable on the basic wages plus Dearness Allowance last drawn by any employee. It shall be calculated as follows,
The maximum amount of Gratuity payable under this Act shall not exceed Rs. 3,50,000/-. The Assistant Commissioner of Labour in the Office of the Deputy Commissioner of Labour has been notified as Controlling Authority under this Act. The Zonal Joint Commissioner of Labour has been notified as Appellate Authority under this Act.