1. Short title, extent, application and commencement.- (1) This Act may
be called the Payment of Gratuity 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
(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[(3-A) 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
(4) It shall come into force on such date
2 as the Central Government may, by notification appoint.
It is an act. When the number of employees cross the minimum level mentioned in the act, the company automatically will be governed by it.
And when an employee continuously works in the same company for 4y & 240 days, employee becomes eligible to exercise the benefits of the gratuity act.