Miscellaneous
3.1 Compulsory Insurance
[Sec. 4A(1)]
i. Every employer (other than
establishment controlled by Government) shall obtain the Insurance from the
Life Insurance Corporation or any other prescribed insurer for his liability for payment towards the gratuity
under this Act, to reduce the burden of the employer from paying a huge amount
of gratuity to his employee.
ii. Exemption from Compulsory Insurance [Sec. 4A(2)]
The Central
Government may exempt certain establishments where :
an approved gratuity fund has already been established and
wants to continue with such arrangement.
Establishments employing five hundred or more persons having an approved
gratuity fund in the manner prescribed in the provisions of the Act.
iii. Registration for Compulsory Insurance [Sec. 4A(3)]
After the employer has
taken the insurance or has established an approved gratuity fund, every
employer shall register his establishment with the controlling authority within
a stipulated time and prescribed manner, for the purpose of implementing the
provision of the Act effectively.
iv.
Rules by the Appropriate Government for Compulsory Insurance [Sec. 4A
(4)]
The Appropriate Government may make rules and such rules may provide:
for the composition of the Board of Trustees of the approved gratuity
fund,
for the recovery of the amount of the gratuity payable to an employee
from the Life Insurance Corporation of India or any other insurer by the
controlling authority.
v.
Failure to pay insurance premium or contribution [4a (5) & (6)]
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In case of default in payment in
respect of contribution towards the approved gratuity fund or premium towards the
insurance, the employer shall be liable to pay the amount of gratuity due under
this Act (including interest, if any, for delayed payments) to the controlling
authority.
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Failure to meet his liability will attract fine extending to Rs.10,000
(in case of continuing offence, further fine of Rs.1,000 per day).
3.2 Nomination [Sec. 6 (1)]
Each Employee should make a
Nomination for payment of Gratuity within 30 days of having completed 1 year of
service.
3.2.1 Distribution of amount of gratuity to
Nominee [Sec.
6 (2)]
In the Nomination, the
employee may distribute the amount of gratuity payable among one or more
nominee.
3.2.2 Nomination in favour of family members [Sec. 6 (3)]
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An employee, having a family at the time of making
nomination, must make nomination in
favour of his family members (nomination made in the name of person
other than family member is void).
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An employee having no family at the time of nomination, may make nominee
any person at his will, but when he
acquires a family, such nomination will become invalid and the employee has to
seek for a new nomination in favour of his family members. [Sec. 6(4)]
3.2.3 Modification of Nomination [Sec. 6 (5)]
An employee can modify the
nomination at any time by giving his employer a written notice in prescribed
form and manner.
3.2.4 Death of Nominee [Sec. 6 (6)]
In case where a nominee
dies before the employee, the employee has to make a fresh nomination in favour
of another person.
3.2.5 “Safe-Custody of Nomination” [Sec. 6(7)]
Every nomination (fresh or altered)
shall be sent by the employee to the employer who shall keep the same in his
safe custody. The nomination shall be effective from the date of receipt of the
same by the employer.
3.3 Inspectors
3.3.1 Appointment of Inspectors (Sec. 7A)
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Inspectors are appointed by the Appropriate Government for the purpose
of the Act. Such inspectors shall be deemed to be a public servant under the
provision of the Act.
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The appropriate Government may, by notification, appoint as many
Inspectors as it deems fit, for the purpose the Act, and define the area to
which the authority of an Inspector so appointed shall extend.
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Where more than one Inspectors are appointed for the same area allocation
of work to be performed by them is also defined by the appropriate authority.
3.3.2 Power of Inspectors (Sec. 7B)
The Inspectors may :
a.
require an employer to furnish such information as he may consider
necessary.
b.
enter in those establishments to which the Act applies to for inspection
and examining the register, record, notice or other document required to be
maintain under the Act.
c.
make copies or take extract or may even seize any document, if he finds
any reason to believe that any fraud or offence has been committed.
d.
exercise such other powers as may be prescribed.
e.
require any connected person to produce any register, record, notice or
other document or to give any information.
3.4 Penalties
(Sec. 9)
3.4.1 False statement or representation
Any person
knowingly making false statement or representation enabling to avoid payment
under the Act, he shall be punishable with imprisonment extend to 6 months, or
with fine upto Rs.10,000 or with both. [Sec. 9 (1)]
3.4.2 Contravention of the Act
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Any employer who contravenes, or makes default in complying
with any of the provisions of the Act, rule or order, shall be punishable with
imprisonment (not less than 3 months, extending to 1 year) or with fine (not be
less than Rs.10,000, extending to Rs.20,000) or both.
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For offence relating to non-payment of gratuity, the
employer shall be punishable with imprisonment (not less than 6 months, but may
extend to 2 years). But the court may reduce the punishment for reasons to be
recorded by in writing. [Sec. 9 (2)]
3.5 Exemption
of employer from liability (Sec. 10)
i. On being
charged with an offence punishable under the Act, an employer may have any
other person (whom he charges as the actual offender) brought before the Court,
by giving 3 days notice of his intention to do so.
ii. After the
commission of the offence has been proved, the employer has to prove to the
satisfaction of the Court:
a. that he has
used due diligence to enforce the execution of the Act, and
b. that the said
other person committed the offence in question without his knowledge, consent
or connivance.
iii. If the employer
proves as aforesaid, the other person shall be convicted for the offence and
shall be liable to similar punishment and the employer shall be discharged from
any liability in respect of such offence.
3.6 Cognizance of Offences (Sec. 11)
No court shall take
cognizance of any offence punishable under this Act save on a complaint made by
or under the authority of the appropriate Government (not below the rank of a
Metropolitan Magistrate or a Judicial Magistrate of the first class).
3.7 Protection
of action taken in good faith (Sec. 12)
No suit or
other legal proceeding shall lie against the controlling authority or any other
person in respect of anything which is in good faith done or intended to be
done under the Act rule or order made there under.
3.8 Protection of Gratuity (Sec. 13)
The Act protects the amount
of gratuity payable to an employee from attachment. No gratuity is payable under
this Act to an employee, employed in any establishment, factory, mine,
oilfield, plantation, port, railway company or shop, exempted under sec. 5,
shall be liable to attachment in execution of any decree or order of any civil,
revenue of criminal court. [Yada Laxmi v. A.P. State Coop. Bank,
Hyderabad], [Taxmaco Limited v.
Roshan Singh], [Chrisostom v.
Federal Bank Ltd.], [Calcutta
3.9 Act to override other
enactments, etc. (Sec. 14)
The provisions of this Act
or any rule made there under shall have effect notwithstanding anything
inconsistent therewith contained in any enactment other than this Act or in any
instrument or contract having effect by virtue of any enactment other than this
Act.
3.10 Power to make Rules (Sec. 15)
The appropriate Government
may, by notification make rules for the purpose of carrying out the provisions
of this Act and every rule made by the Central Government under this Act shall
be laid, as soon as may be after it is made, before each House of Parliament.
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