Write a note on ‘Payment of Gratuity Act, 1972’.

(1)            The payment of
Gratuity Act was passed in 1972.

The West Bengal Government
first passed an ordinance in 1971. Later, the Indian Labour Conference & the
Labour Ministers at their meetings felt the need for a central law on Gratuity. The
model of West Bengal was accepted, except the provision that gratuity should be
forfeited in case of dismissal or gross
misconduct.

 This Act has a
wide coverage  & includes all factories, mines, oil fields,  plantations, ports,
railways, shops or establishments as specified by a Central Government
notification.

ELIGIBILITY FOR
GRATUITY : -

(1)   Any person employed on
wage / salary.

(2)   At the time of retirement or
resignation or on superannuation, an employee should have rendered continuous service of
not less than five years.

(3)   In case of death or
disablement, the gratuity is payable, even if he has not completed 5 yrs of
service.

 The quantum of gratuity is to be computed at the
rate of 15 days wages (7 days wages in case of seasonal establishments) based on rate of
wages last drawn by the employee concerned for every completed year of service or a part
thereof exceeding 6 months.

Calculation of Gratuity :
-

Gratuity =   Monthly
Salary /26      X      15 days      X      No. of yrs of
service. 

Maximum Gratuity payable under the
Act is Rs. 3,50,000 / - (w.e.f. – 24-09-1997).

Non payment
of gratuity payable under the Act is punishable with imprisionment upto 2 yrs (minimum 6
months) and / or fine up to Rs. 20,000 / - Other contravention / offenses attract
imprisonment upto 1 yr and / or fine upto Rs. 10,000.