Insurance Policy (Approved Gratuity Fund) Sec 4A
- Every employer must take an insurance policy for the estimated amount of gratuity.
- Insurance policy may be taken from LIC or any other insurance company.
- If the employer has 500 or more employees then employer may take an insurance policy or he may create approved gratuity fund.
- For creating the gratuity fund the employer has to take the approval from the controlling authority. If the employer has created approved gratuity fund then he needs not to take an insurance policy.
- When employee will retire then the gratuity will be paid to him from Gratuity fund or Insurance Policy.
Appropriate Government: Sec 2(a)
Appropriate Govt means the govt which performs various functions under Payment of Gratuity Act.
If the employer has a business of Plantation, mine, airport, railway etc then central govt is the appropriate govt. Similarly if the employer has the business in the area of central govt then also central govt is the appropriate govt.
For all other employers State govt is the appropriate govt.
Recovery Of Gratuity:
ü Gratuity is recovered by employee from employer by fulfilling the provisions of payment of gratuity act. For recovery of gratuity employee may make a complaint to the govt or court and they will take suitable action against the employer. In the action the govt or the court may appoint inspector and the inspector will carry out investigation into the matters of employer.
ü After investigation the inspectors will give the report to govt or the court and depending upon the report govt will issue order.
ü The inspectors have a number of powers so they can carry out the investigation.
ü The inspector does not have power to order the employer to pay gratuity.
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