Saswatabanerjee
Partner - Risk Management
Jeevarathnam
Sr. Manager Hr/admin
Arun Kumar Maitra
Presently Working As Company Secy. In Old
Pandit Satish
Hr Manager.
Raviatreya
Commercial
+11 Others

Hi,
Can someone inform me if our company has to still follow gratuity rules. we have been registered under shops and establishment act in 2007, just completed 5 years in 2012. When we started we had only 7 employees, gradually we grew to 35,but again we have now reduced to 9 employees, so we have to follow gratuity rules.?
thanks and regards
djo
From India, Ahmedabad

dear only those employees will be covered who have been working with company since last 5 years. satish
From India, New Delhi
Hi Daisy All the organisaitons are covered under gratuity act. But applicability of the Gratuity is for the employees who are completed 5 years of conitnious employment in the same organisation.
From India, Bangalore
Dear Satish/Jeevarathnam, Thanks for your quick response. Do our company still have to follow the gratuity rules, when we have now reduced to only 9 employees? thanks and regards daisy
From India, Ahmedabad
Yes it is being followed not only our company but every company which comes under it. Satish
From India, New Delhi
no no you are not eligible because you are not covered under factory act as you are 9 employees you are not eligible for Gratuity. satish
From India, New Delhi
Dear Ms. Daisy,
This is amend what has been answered to you by our members. Your company is eligible for Payment of Gratuity Act. Although, you shall pay the gratuity only if the employee has continuous service in your organization for 5 years.
I hope this clarifies your query.
From India, Visakhapatnam
Dear Jeevarathnam
Dear Satish, Ms Das
Thank you, very much, for your valued inputs. I have understood that I need to disburse gratuity to those who complete continous 5+ years employement in our organisation.
I need one more clarification, if an employee has worked for 4 years and 5 months can he demand gratuity? out of 5 months 2 months is notice period.
thanks and regards
daisy
From India, Ahmedabad
Dear Satishji,
Company Policy is not allowing me to. Even I am in favour of paying, but we need to look at Precedent also. Once we implement for 4.5 yrs, others might start demanding for the same.
Anything as policy from the government which I can show the management?
thanks and regards
daisy
From India, Ahmedabad
Dear Ms. Daisy,
The date of completeion of 5 years shall be taken as from the joining date of the employee till the last date of leaving. The 240 days is counted only for continuance of service of an employee. Certainly, only a person who has completed 4 years and 240 days of service is thereby eligible for gratuity.
In the case specified by you, the employee is not eligible.
P.S: The Gratuity is paid only if the employee date of leaving should have completed 5 years.
From India, Visakhapatnam
Dear Sharmila, Is it compulsory for all employee claiming gratuity to fill form I? Do we have to file the form I in any government department? thanks and regards daisy
From India, Ahmedabad
Dear Ms. Daisy,
Please find the below Statutory compliane forms, FYI....
Yes, the Form I should be filled.
Form A Notice Of Opening
Form B Notice Of Change
Form C Notice Of Closure
Form D Notice for excluding husband from family
Form E Notice of withdrawal of notice for excluding husband from family
Form F Nomination
Form G Fresh Nomination
Form H Modification Of Nomination
Form I Application for gratuity by an employee
Form J Application for gratuity by a nominee
Form K Application for gratuity by a legal heir
Form L Notice for payment of gratuity
Form M Notice rejecting payment of gratuity
Form N Application for direction
Form O Notice for appearance before the controlling authority
Form P Summons
Form Q Particulars of application under Section 7
Form R Notice for payment of Gratuity
Form S Notice for payment of Gratuity as determined by appellate authority
Form T Application for recovery of gratuity
Form U Display of abstract of the act and rules
From India, Visakhapatnam
Dear Sharmila,
Thanks for appraising me with detailed statutory compliance forms. Do we have to file filled form I in any of the State / Central Government. We have company registration from Gujarat State.
thanks and regards
daisy
From India, Ahmedabad
Hi,
I am recently joined a new financial company. And i want to know how to save tax of the company.
i mean to say hw many employees will appoint in the company to save tax.
Please Help me.
Regards
Riya
From India, Mohali
Dear Ms.Daisy

Please read section 1(3)(c) of the Payment of Gratuity Act. According to this sub section of Section 1 of the Payment of Gratuity Act, if in any shop or establishment to which any law relating to shops and establishments is applicable, and which employs ten or more persons then the Payment of Gratuity Act is applicable, As your shop/establishment has employed more than 10 persons at some point in time, the Payment of Gratuity Act is applicable to your establishment. Please also read section 1(3A) of the Payment of Gratuity Act. This section says that in the case of a shop or establishment which had employed 10 or more persons and in which the number of employees falls below ten at some point in time, the Payment of Gratuity Act will continue to apply even though the number of employees has become less than ten. This is as far as the applicability of the Payment of Gratuity Act to your establishment/shop. For an individual employee to claim the benefit of the Payment of Gratuity Act, this Act should be applicable to the establishment and the individual employee should satisfy the conditions specified in the PG Act to become eligible to get gratuity.

With regards
From India, Madras
See as per the provisions of the PG Act, 1972, any establishment which employs 10 or more workmen it shall be covered under the Act.
So far as the workmen are concerned, the liability to pay gratuity arise when they leave the job either volutarily (resignation) after completion
of 5 years or on superannuation ( age of retirement say 60 or above). After the coverage of the Act, if the number of workmen reduced below
10, then also the Act shall continue to apply.
From India, Chennai
Dear Friend,
As per Gratuity act, In any year if the employees strength is more than 10,then gratuity is applicable.
Gratuity is given to those employees who are in continious service for 4 years + 280 days of fifth year.
Thanks
Narendar Paleti
From India, Hyderabad
The gratuity Act applies to an establishment from the moment it has 10 employed persons.Even if the number of employed person falls below 10 the Act will continue to apply.
Varghese Mathew,
09961266966
From India, Thiruvananthapuram
Dear all, there is no needs of Nos but as per gratuity act one should have to complete continue five years of service than he will be entitled for gratuity. Rajvir
From India, Delhi
It is applicable to all shops ,or establishments,where 10 or more employees are employed on any day of the preceding twelve months.It shall continue to be covered, even if at a later date the no. of employees are reduced.Gratuity Act has wide application; the only condition is 10 or more employees.
From India, Bokaro
Hi, As regard to applicability of Gratuity, forwarding Word attachment file which is given vivid explanation. Regards Ravu
From India, Mumbai

Attached Files
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File Type: doc paymentofgratuityact.doc (86.0 KB, 29 views)

dear daisy, if one employee who has completed 5years of continous service alongwith 6months den dat 6months calculate as 1year...u calculate gratuity with no. of services of 6years regards gayatri
From India, Halisahar
The employee needs to fill form I You have to fill form J whengiving his gratuity None of them needs to be given to the government. Keep it for your own records.
From India, Mumbai
Dear all,
If go through the definations about the applicability, in my opinion Gratuity is applicable in your case even the number is less than 10 today, subject to completion of 5 years of service by the individual. Look at the definations,
An Act to provide for a scheme for the payment of gratuity to employees engaged in factories, mines, oilfields, plantations, ports, railway companies, shops or other establishments and for matters connected therewith or incidental thereto. BE it enacted by Parliament in the Twenty-third Year of Republic of India as follows :
Section: 1
Short title, extent, application and commencement.
(1) This Act may be called the Payment of Grataity Act, 1972.
(2) It extends to the whole of India:
Provided that in so far as it relates to plantations or ports, it shall not extend to the State of Jammu and Kashmir.
(3) It shall apply to¬ -
(a) every factory, mine, oilfield, plantation, port and railway company;
(b) every shop or establishment within the meaning of any law for the time being in force in relation to shops and establishments in a State, in which ten or more persons are employed, or were employed, on any day of the preceding twelve months;
(c) such other establishments or class of establishments, in which ten or more employees are employed, or were employed, or, any day of the preceding twelve months, as the Central Government may, by notification, specify in this behalf.
(3A) A shop or establishment to which this Act has become applicable shall continue to be governed by this Act notwithstanding that the number of persons employed therein at any time after it has become so applicable falls below ten.]
(4) It shall come into force on such date as the Central Government may, by notification, appoint.
Section 3(b) clearly says " ten or more persons are employeed or were emplyeed".
Better to make the 5 years completed employees eligible to avoid further legal consequences.
Ulhas Chandratre
Sr.HR Professional, Pune
From India, Pune
The Payment of Gratuity Act is applicable to all employees working in factories, oil-fields,mines,plantations,ports,railway company and every shops & establishment employed 10 or more persons on any day of the preceeeding 12 months.It further stipulates that once a shop or establishment comes into the purview of this Act,it shall continue to be within the ambit of this Act even after number of employees fall below 10.However, the Central Govt. can exempt any establishment from the applicabilty of this Act.In order to become eligible to recive it,the concerned employee has to fulfil the requirement of "continuous service"as defined in the Act.Futher, it is payable only under the circumstances laid down in the Act and not otherwise e.g. in case of retirement,superannuation,resignation,death etc.
Non-payment of gratuity is a serious offence and may result in payment of additional penal interest plus other consequences.So, please take actions as per the above provisions of the Act.
From India, Delhi
Dear Djo,
Please understand THE PAYMENT FOR GRATUITY ACT is applicable on the following organization:-
1. Every Factory (as defined in Factories Act), mines, oil filed, railways, ports etc.
2. Every shop or establishment (as defined in Shop Establishment Act of a state) applies in which 10 or more employees are employed on any day during the year.
3. Every establishment employing 10 or more persons.
4. Once Gratuity Act applies on any establishment, will continue to apply if the employee strength fall short of 10 employees.

In view of the above, your organization still have to follow Gratuity Act even your total strength have become 9.
So, you must continue and make contribution towards gratuity of all those employees who have completed 5 years of continuous service with your organization.
For any query, please revert back.
ThanX & regards,
Suman Yadav
From India, Delhi
All factory,mine,plantation,oil-field,railway company port and shops & establishment in which 10 or more persons are employed are covered by the Payment of Gratuity Act.Once a shop or establishment comes into the purview of the Payment of Gratuity Act,it shall continue to be within the ambit of this Act even after number of employees falls below 10.
From India, Delhi
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