Friday, 17 October 2014

The Payment of Gratuity Act 1972 Page 4

Payment of Gratuity rules:
Government has created some rules known as payment of gratuity rules. According to these rules every employer has some duties under payment of gratuity. Following are the duties of employer under payment of gratuity rules:
ü  Every employer has to put a notice outside his office and the notice must mention that payment of gratuity is applicable or not.
ü  The notice must also mention the manner in which the gratuity is calculated.
ü  Employee has to appoint an officer responsible for payment of gratuity.
ü  The name, contact number and designation of this officer must be disclosed on the notice board.
ü  If there is any change in the business or the employer the employer must intimate the controlling authority within 30 days of change.
ü  When the employer wants to close down his business then he must inform the controlling authority at least 60 days before the date of closure. At this point of time the controlling authority will compute the amount of gratuity and total gratuity payable to the workers will be kept in a separate bank account and it will be given to the employees on the closure of business.

Forfeiture of Gratuity:
   ü  Under Section 4(6) if the employer has to recover any advance or loan from the employee then the employer may forefeet the amount of gratuity. Example: If the employer has to pay Rs. 200000 gratuity and employee has taken Rs 50000 advance then Rs 50000 will be forfeited and the balance 150000 will be paid.
   ü  The employer cannot forefeet the amount in excess of the amount of Loss/Advance.

Controlling Authority:
   ü  Under sec 3 the government has appointed controlling authority.
   ü  Controlling authority will perform all the functions required under Payment of gratuity Act.
   ü  Controlling Authority may send inspectors for investigation of employer at the same time the controlling authority may order the employer to pay the gratuity to employees.

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