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Applicability and Non-applicability of Act - Payment Of Gratuity Act(1972), Industrial Laws Video Lecture | Industrial Laws - B Com

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FAQs on Applicability and Non-applicability of Act - Payment Of Gratuity Act(1972), Industrial Laws Video Lecture - Industrial Laws - B Com

1. What is the applicability of the Payment of Gratuity Act (1972)?
Ans. The Payment of Gratuity Act (1972) applies to establishments that employ 10 or more employees on any day in the preceding 12 months. It covers factories, mines, oilfields, plantations, ports, railway companies, and other establishments as notified by the government.
2. Are all employees eligible for gratuity under this act?
Ans. No, not all employees are eligible for gratuity under the Payment of Gratuity Act (1972). Only employees who have completed a minimum of five years of continuous service with the same employer are eligible for gratuity payment. However, the act also provides for certain exceptions where gratuity can be paid even before completing five years of service.
3. Can an employer refuse to pay gratuity to an eligible employee?
Ans. An employer cannot refuse to pay gratuity to an eligible employee, as long as the employee meets the criteria specified in the Payment of Gratuity Act (1972). If an employer denies or withholds gratuity payment without a valid reason, the employee can file a complaint with the controlling authority appointed under the act.
4. Is there a maximum limit to the amount of gratuity that can be paid under this act?
Ans. Yes, there is a maximum limit to the amount of gratuity that can be paid under the Payment of Gratuity Act (1972). As of now, the maximum amount of gratuity payable is 20 lakhs INR. If an employee is entitled to a higher amount, the employer is not legally bound to pay more than 20 lakhs under this act.
5. Can an employee claim gratuity if they resign or are terminated before completing five years of service?
Ans. Generally, an employee cannot claim gratuity if they resign or are terminated before completing five years of continuous service. However, there are exceptions to this rule. If an employee's service is terminated due to death or disablement, or when the contract period expires, gratuity can still be paid even if the employee hasn't completed five years of service.
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