The shop had 10 workers 30 years ago. Since then, it has only had 8 workers. Is the shop eligible for gratuity today? I heard that gratuity is not applicable for shops with less than 10 workers, but I want to clarify this since the shop did have 10 workers previously. Would a bonus also be applicable in such a case?
From India, Bengaluru
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1From India, Bengaluru
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Whenever the applicability of a labor law is prescribed based on the minimum threshold of the number of employees employed in an establishment, the subsequent reduction in the number would not, in any way, abate its continued application. This is the general interpretation, stemming from the reasoning that an employment benefit once conferred by the application of a statute becomes a customary benefit that cannot be taken away.
Moreover, Section 1(3-A) of the Payment of Gratuity Act, 1972 explicitly lays down a caveat in this regard as follows: "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." This principle also applies to the Payment of Bonus Act, 1965.
Thank you.
From India, Salem
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Moreover, Section 1(3-A) of the Payment of Gratuity Act, 1972 explicitly lays down a caveat in this regard as follows: "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." This principle also applies to the Payment of Bonus Act, 1965.
Thank you.
From India, Salem
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Brief Kerla Shop & Establishment Act.pdf
Gratuity Act-Teachers-Ma dhya Pradesh.docx