The Payment of Gratuity Act, 1972
Payment of Gratuity Act, 1972 is a type of legislation in India that falls under labour laws. This law applies to India with at least ten workers. A gratuity is a form of financial compensation given to employees by an organization as a token of gratitude for the work done.
The purpose behind this act is to acknowledge the contribution of employees towards company’s growth and development.
Key Takeaways
- The amount is usually calculated on the basis of the employee’s service tenure and last drawn salary. It is usually given to employees who have served the company for a minimum period of five years. It gives their hard work and dedication recognition.
- Gratuity is paid at the time of Retirement, Resignation, Death or Disability. There are certain conditions for termination of gratuity, such as Misconduct, Resignation before completing 5 years of service, Termination due to disability or death or if the employee is on a contractual basis.
- If an employee is terminated due to a disability or death, the employer must pay the gratuity amount to their legal heir or a nominee. It must also be noted that an organization cannot refuse payment of gratuity to an employee on account of bankruptcy. No order of the court will be able to withhold this action.
Hence, the gratuity amount encourages the employee to work efficiently and improve productivity. This act overrides other acts and statutes in relation to gratuity. The only need of the hour is to change or modify the implementation of the act as this act is still not followed in many companies.
15 Laws and Regulation that every HR Manager should be aware of
HR Managers are responsible for shaping the overall growth of the company. Right from recruitment, induction, training and development to performance assessment and grievance resolution, they are responsible for the performance, retention, and satisfaction level of employees. From the legal point of view, Law plays a very important role in the duties of an HR Manager though it may not always be evident. For instance, hiring is accompanied by contracts, which are regulated by the Indian Contract Act, 1872. Firing may require one to follow the provisions of different contracts, ensure that any intellectual property created by an employee is protected in favour of the company, and that proper disciplinary actions take place if someone is being fired due to a breach of the code of conduct.
Table of Content
- Laws and Regulations that Every HR Manager should be Aware of
- 1. Sexual Harassment (Prevention, Prohibition and Redressal) Act, 2013
- 2. The Apprentices Act, 1961
- 3. The Maternity Benefit Act, 1961
- 4. The Payment of Gratuity Act, 1972
- 5. The Employees Provident Fund Act, 1947
- 6. The Factories Act, 1948
- 7. The Workmen’s Compensation Act, 1923
- 8. The Payment of Wages Act, 1936
- 9. The Industrial Disputes Act, 1947
- 10. The Payment of Bonus Act, 1965
- 11. The Employees State Insurance Act, 1948
- 12. Child Labour Regulations (CLR)
- 13. The Trade Unions Act, 1926
- 14. The Equal Remuneration Act, 1976
- 15. The Minimum Wages Act, 1948