factory (as defined in Factories Act),
mine, oilfield, plantation, port and
shop or establishment to which Shops
& Establishment Act of a State
applies in which 10 or more persons
are employed at any time during the
establishment employing 10 or more
persons as may be notified by the
Act applies, it continues to apply
even if employment strength falls
person employed on wages/salary.
the time of retirement or resignation
or on superannuation, an employee
should have rendered continuous service
of not less than five years,
case of death or disablement, the
gratuity is payable, even if he has
not completed 5 years of service.
quantum of gratuity is to be computed
at the rate of 15 days wages (7 days
wages in case of seasonal establishments)
based on rate of wages last drawn
by the employee concerned for every
completed year of service or a part
thereof exceeding 6 months.
total amount of gratuity payable shall
not exceed the prescribed limit.
case where higher benefit of gratuity
is available under any gratuity scheme
of the Co., the employee will be entitled
to higher benefit
= Monthly Salary x 15 days
x No. of yrs. of service
Gratuity payable under the Act is
Rs. 3,50,000/- (w.e.f. 24-9-1997)
Nonpayment of gratuity payable under
the Act is punishable with imprisonment
up to 2 years (minimum 6 months) and/or
fine up to RS 20,000/-. Other contravention/offenses
attract imprisonment up to 1 year
and/or fine up to RS 10,000.