Our country has made a vast number of legislations on rules governing employment. Time and again, these rules have regulated the conduct of the relationship between employer and employee. One such legislation is the Payment of Gratuity Act, 1972. The benefit that the employer provides to the employee for his or her services consecutively for five years or more is defined as Gratuity<\/a><\/em><\/strong>. The Act is just like various other statues like the Minimum Wages Act, Employment and Social Policy, etc. They all come under the umbrella of labour laws, and it specifies the minimum benefits that must be provided to the employees. The Payment of Gratuity Act ensures social security and facilitates the welfare of the employees working in the companies, industries, and different organisations<\/strong>. In this article, we shall have a close look at those rules of Payment of Gratuity Act, 1972.<\/p>\n\n\n\n The\nsole purpose of the Payment of Gratuity Act, 1972 was with a view to provide a\ngratuity to the employees working in the companies, factories, mines,\noilfields, shops or other establishments upon their superannuation,\nresignation, retirement, death or disablement.<\/p>\n\n\n\n When an employee has rendered his or\nher services for at least five continuous years on his retirement,\nsuperannuation, resignation, death, or disablement, then the employee shall be\neligible for payment of gratuity<\/strong>. One notable exception to this rule is that the five\nyears specified above of continuous service is not mandatory in the event of\ntermination of employment due to death or disablement of the employee. A person\nwho has retired shall also be entitled to the payment of gratuity along with\nhis pension. In Allahabad Bank and others vs. All India Bank Retired Employees\nAssociation, the court held that the gratuity amount could be paid with the\npension. The pension benefits can include the gratuity amount as well, but\ngratuity amount must be paid at all costs to the employees.<\/p>\n\n\n\n Where an employee suffers death or\ndisablement by accident or disease, then it is the legal obligation of the\nemployer to pay the gratuity amount to the nominee of the employee or the legal\nheir depending upon the case regardless of the number of years the continuous\nservice has been rendered<\/strong>.<\/p>\n\n\n\n Under\nthe rules of Payment of Gratuity Act, 1972, it provides for a provision wherein\nminors are legal heirs, and the controlling authority must invest the amount of\ngratuity in such bank or other financial institutions for the best interests of\nthe minor till he or she attains majority. <\/p>\n\n\n\n The\nAct further provides that where the services of an employment has been rendered\nfor at least six months, the gratuity amount shall be calculated at the rate of\nfifteen days of wages based upon the rate of wages drawn last by the concerned\nemployee. However, it must be noted that the amount paid for overtime work\nshall not be taken into consideration under the rules of Payment of Gratuity\nAct. <\/p>\n\n\n\n Another\nrules of Payment of Gratuity Act states that the amount which is payable to an\nemployee must not go beyond twenty months wages and an employee may get better\nterms of gratuity under any agreement, award or contract with the employer and\nnothing in this section shall affect such right of the employee.<\/p>\n\n\n\n An\nemployee has the right to seek gratuity for the services rendered by him or\nher, but the critical thing to know here is that such right can be curtailed\nunder two conditions:<\/p>\n\n\n\nScope and objective of the Act<\/h2>\n\n\n\n
Various definitions to understand the rules of Payment of\nGratuity Act<\/h2>\n\n\n\n
Legal Rules of Payment of Gratuity Act<\/h2>\n\n\n\n
Rule of Compulsory Insurance<\/h2>\n\n\n\n