Is Gratuity Mandatory ? - Doc Download - CiteHR
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Dear All,
Is it mandatory for all the organisations to provide Gratuity ? what are general rules regarding gratuity provisions ? Is it optional for organisation or mandatory ?
Is there any legal implications , if organisations does not have gratuity scheme ?
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Gratuity is manadatory for all factories, shops and establishments employing ten or more persons and paybale to an employee who compelted a continuous servcie of five years. B.Saikumar Mumbai
Dear Friend, Please find the attachment of Gratuity Act.., May it will be useful to you..

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File Type: doc Gratuity Act, 1972.doc (286.5 KB, 1700 views)

the applicability of the act is:
every factory ,mine,oil field, plantation, port,railways, company, shop, establishment, or educational institution employing 10 or more employees have to provide gratuity.
this act is not applicable to:
apprentices .
person who hold civil post under Central govt. or state govt.
Dear All,
Querry regarding gratuity is aptly covered. However, in any of the type of organisations mentioned therein, if the employment service pattern is on a contractual basis viz., 2 to 3years, then does this statutory requirement be applicable even if the renewal of contract employment is initiated on the succeeding day of previous contract expiry date as it technically amounts to continuation of service.
kindly clarify please.
If an employee joins a firm on "X" day, works here for 1.5 years, quits this firm to join another and rejoins the previous firm in a span of 45 days on "Y" day, the 5 year period will be considered from day "X" or day "Y".
Hi James
(1) Gratuity 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) Gratuity 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, on any day of the preceding twelve months, as the Central Government may, by notification, specify in this behalf.
1[(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.]
One organization has promoted their employee but reduced his DA allowance and in turn that impact Gratuity and PF contribution. What is the recourse for the employee? The employee tried to talk to management, but they asked him to resign if he is not happy with the change in salary structure. He was also told that this is a private organization hence it is not binding on them to pay gratuity to employees. Please let me know if the employee can take any legal route.
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