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Q. Is a retrenched employeeentitled_togratuity?
A. Retrenchmentmeansterminationof service and terminationof serviceis
covered by the definition of retirement under the Act. Retrenchmentof an
employeefalls withinthe scope-ofsection4(l Xb) of the act underwhich gratuity
is paya.bleto an employeeon his retirement.Retrencherlemployeeis tti-erefor|
entitledto gratuity.
Note:-Heldin state of Punjabv. LabourCourt, Jullunderlggl I LLJ 354.
Q. what is the minimum length of servicerequired for earning gratuity?
A. In order to earu gratuity the employeehas to reuderminimum five yearsservice.
S:4(l).
Q. Is the condition of five years' minimum service applicable in the caseof
death or disablementof the employee?
A. In the caseof deathor clisablement
of theemployeegratuity becomespayable
to his nomineqor hgirs even if he has renderedleis thaniive y6ars'servici.
s.4(l ).
Q. Is the provision contained in section4(rxb) of the Act, which entittesan
emplgyel to gratuity. on his retirement or resignation after 6ontinuous service
of only five years, violative of Article l9(1Xg) of the constitution of India?
. A. The provisionfo-rpaymentof gratuitycontainedin section4(lXb) of the Act
is one of the minimal serviceconditions-which must be made avaitiute to:the
gmployee! notwithstanding.
the financial capacity of the employer to bear its
burden.The said provisionis a reasonable
restrictionon the risht 6f the emolovcr
to carryon his businesswithin the meaningof Article l9t6) oithe Constitutioriof
India. The said provisiouis both sustainableand valid.
Note:- Held in Bakshishsingh v. DarshanEngineer1lg_
works & ors. 1993
II CLR 1088.
.
Q. Is gratuity payable on the basis of basic rvagesonly?
. A. Gratuity is payableon the basisof all emolumentsearnedby the employee,
i.e. basicwagesplus dearnessallowance.
S.Zisl.Is
every
employee
employed
in
a
factory,
mine,
etc.,
rvho
has
rendered
-Qminim-um5 years'_serviceeligibre for payment of gratuity irrespectiveof the
rate of the lvagesdrawn by him?
A.- By Act No.34 of 1994 the higher amount of wages for dcfinition of
nplyees"is removed.
removed.Now from 24.5.i
"emplyees"
24.5.{994all
ll the employeds
emnlovedsirrespective
inesnectiveof rheir
their
wagesare eligible for Paymentof Gratuity.
Amount of gratuity
Q. What is the rate of gratuity payable to the employee?
A..Gratuity is payable to the employgeat the rate of 15 daj's' wagesfor every
comple-ted
year of serviceor part thereof in excessof six mont6s; bas;d on the rat!
ot hls last drawn wages.In the caseof monthly rated employee,the.rate of oue
oay's wagesis to be computedby dividing the monthly wag'esby 26 working days.
s.4(2).
s.4l
PAYMENT
oF GRATUITY
AcT, 1972
16ll
under the employer for such period if he has actually worked for not
less than seventy-five per cent of the number of days on which the
establishmentwas in operation durirrg such period.l.
NOTES
Public Holidays and Sundayshave to be includedin computingthe period of employment.D.B.R.
Mills v. AppellateAuttutrity,(1985) I LLN 622: 1985lab IC 6t2 : (1985) I LIJ l8l (APXDB) ta
caseunder former Section 2(c)1.