2. Concept of Social
Security
A protection for self and / or
dependants against LOSS OF
INCOME and
UNDESIRED WANTS
due to
un-employment
Incapacity to work because of
---
-Invalidity or infirmity –
PERMANENT OR TEMPORARY
3. Gratuity- A Gracious payment to
statutory right. .
Sec. 13. Protection of gratuity:
No gratuity payable under the Act
shall be liable to attachment in
execution of any decree or order of
any civil, revenue or criminal court.
Gratuity to an employee cannot be
attached by the Court.-
G. Narayana Rao v V. R. Nagimani,
1997 Lab IC 902 (Kant)
4. Attachment of gratuity to
dependants. In view of provisions
of S. 60(1)(g) of CPC and also S.
4(1) read with 13 of PGA, gratuity
payable under the Act to legal
representative of deceased Govt
employee does not lose its
character and is not liable to
attachment in execution of any
decree of civil court.
D. Vimala v Canara Bank, (1980) 1
Cur LR 228 (AP)
5. Appropriate Government. 2(a)
Central Govt. -
1. Establishment Belonging to or under
the control of Central Govt.(+ 10
employees)
2. Establishment Having branches in
more than one state. It is different
from Factories.
3. Factory belonging to or under the
control of the Central Govt.
4. Major Port, Mine, Oil field or Railway
company
State Government -In other all cases,
6. The Central Government is the
appropriate Government only in
relations to an establishment
having branches in more than one
State. There is no like provision
in relation to such an
establishment having factories in
different States-
Jeewanlal Ltd v Appellate
Authority, (1984) 4 SCC 356:
1984 SCC (L&S) 753.
7. Who is eligible to claim gratuity?
EMPLOYEE –Sec. 2(e). (Other than an
apprentice. Includes Manager/ Supervisors)
– Does not include a Govt. servant who
is governed by any other Act or by
any rules providing for payment of
gratuity.
PERFORMING -
– Skilled, Semi & Un-Skilled, Manual,
Supervisory, Technical, Clerical
Work.
– NO SALARY LIMIT w.e.f. 26 Nov 92.
8. A trainee outside the Apprentices Act,
q961 is covered by the definition of
‘employee’.
Orissa Mining Corporation Ltd v
Controlling Authority under PGA,
(1994) 2 LLN 1130: (1995) 1 LLJ 381
(Ori)
House worker not working in any
establishment would be an employee
under the Act. .
Bagi Beedi Factory v Appellate
Authority under PGA, (1998) 1 LLN
582: (1998) 93 FJR 416
9. Establishment not defined:
Shops, hotels, temples,
municipal boards, Cantonment
Boards, Electricity Boards,
Educational Institutions, Motor
Transports, Clubs, Trusts &
Societies registered under the
Societies Registration Act, 1860
Condition:Ten or more employees
and not persons in any ;
10. Time limit for payment of
Gratuity: Thirty days.
An employee, if his date of
super-annuation is known can
apply 30 days before his
retirement.
11. How to calculate Gratuity ?
1. Max. gratuity : Rs. 3.5 Lakhs [u/s (3)]
w.e.f. 1998 (Wage = Basic + DA)
How to calculate gratuity
Wage/26 x 15 x No of completed year
Of service
No. of days for which gratuity is to be
paid on rendering one year service
Seasonal Estb. : 7 days
Others : 15 days
12. Forfeiture of gratuity S. 4(6)(b)
Wholly or Partially – If employee is
terminated for
1. Riotous or Disorderly conduct
2. Any other act of violence
3. An offence involving moral turpitude,
committed in the course of employment.
13. Forfeiture to the extent of
damage/loss . Sec. 4(6)(a)
If terminated for any act, willful
omission or negligence causing
any damage/ loss/ destruction to
the property of employer
Before forfeiture, the disciplinary
proceedings should quantify the
loss or damage.-D.V.Kapoor v
UOI, 1990(4) SCC 314.
14. If a workman is guilty of a serious
misconduct such as acts of
violence against mgt or other
employees or riotous or
disorderly behavior in or near the
place of employment, which
though not directly causing
damage, is conducive of grave
indiscipline, then his gratuity can
be forfeited in its entirety. (1973)
2 SCC 502; 1973 SCC L&S 570.
15. Gratuity of an employee cannot
be withheld even if disciplinary
proceeding is pending against
him. B.L. Gopalakrishna v Karnataka
Soap & Detergents Ltd, 1996 Lab IC
140 (Kant). .
Gratuity of an employee
dismissed for slow-down of work
cannot be withheld since there is
no such bar in the Act. –Permali
Wallance Ltd v State of M.P.
(1996) 2 LLJ 515 (MP)
16. Rightful claim of gratuity cannot
be defeated on the ground of
technicality such as limitation.
Controlling Authority has
condoned the delay and High
Court in writ jurisdiction cannot
interfere with said finding of the
authority.
Mineral Area Development
Authority v State of Bihar, (1988)
3 LLN 484 (Pat)
17. Damages for occupying
quarter cannot be withheld
from gratuity .
Rajender Pai H v Canara
Bank, (1998)1 LLJ 577 (Ker)
Gratuity cannot be withheld
for not vacating the
company’s quarter .
Madan Mohan Laik v Voal
India Ltd, 1997 Lab IC 240
(Cal)
18. When an employee is entitled ? S. 4
1. On superannuations
2. On retirement
3. On resignation
4. On death
5. On disablement
Compulsory premature retirement
challenged in Court can not be a
ground for with holding of gratuity –
post retiral benefit
Brundban Sahu V Orissa SRTC Ltd. 1992
Lab IC 1335 (Ori)
Retirement includes retrenchment.
If rendered 5 yrs.
Continuous service
Not applicable
19. Continuous service: Sec. S-A.
Includes absence on account of public
holidays, weekly holidays, sickness,
maternity leave, accident, leave,
absence without leave in absence of
an order treating that absence as
break in service in accordance with
standing Orders/ rules/ regulations;
Lay-off, strike or lock-out or cessation
of work not due to any fault of the
employee
240 days / 190 day below ground in a
mine in preceding 12 calendar months
20. Process of claiming gratuity. S. 7
– Application to be made to employer
– Employer to determine the gratuity and
inform person as well as the controlling
officer.
– Employer to pay gratuity within 30 days
from the date it becomes payable.
– If delay, the employer to pay simple
interest from the date it became payable
– In case of dispute, the employer has to
deposit the admitted amount with CA
21. –Controlling Authority appointed U/s
3 Appellate Authority appointed U/s
7(7), 7(8)
–Inspector U/s 7A. w.e.f. 01.07.84
–C.A. can award compound interest
on delayed payment at such rate as
specified by Central Govt.
–Interest can not be more than
amount of gratuity.
22. Condonation of delay before Controlling Authority
– Rule 10 – 90 days of concurrence of cause
The Controlling Authority may accept any
application under this sub-rule, on
sufficient cause being shown by the
applicant, after the expiry of the specified
period.
Natraja Pillai V Regional Joint Labour
Commissioner & Ors, 1993 I LLJ 674 (HP)
Whether it was mandatory to file Separate
application for condonation of delay
23. Condonation of delay in appeal
– Period of appeal – 60 days
– Max. condonation – 60 days
– Appellate Authority can not condon beyond
120 days.
– Western Coalfields Ltd. V Cont. Authority
under PGA, Jabalpur : 2000 Lab IC 3458
(MP)
– Rules prescribing for limitation are only
procedural and do not intend to extinguish
right of employees. Moreover when employer
has benefited from money belonging to
employees. He can not resist claim on
technical plea of limitation.
– P. Rama Rao V Cont. Authority & ALC(C),
S. 7(7)
24. Appellate Authority has
powers to remand the matter
to the Controlling Authority
for fresh disposal.
East India Company Ltd v
Appellate Authority under
Payment of Gratuity Act,
(1993) 1 LLN 831 (AP)
25. Central/State Govt employees
are not governed by PGA,
The President has no powers
to withhold gratuity of a
employee after his retirement
as a measure of punishment.
Gratuity is also a statutory
right.
D.V.Kapoor v UOI, 1990 (4)
SCC 314
