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A worker is entitled to gratuity in the contingency of superannuation, retirement, resignation, death or disablement due to accident or disease, subject to completion of five years continuous service.The condition of five years is however, not applicable in case of death or disablement.The Act has been recently extended to the State of Sikkim w.e.f. The Act provides for payment of gratuity to employees employed in any factory, mine, oilfield, plantation, port, Railway Company and in any shop or establishment employing ten or more workers.It has also been extended to motor transport undertakings employing ten or more workers.After having discussed the amendments introduced, let us briefly discuss the salient features of the Payment of Gratuity Act, 1972 so as to have an understanding of the basic provisions of the Act.As mentioned earlier, the Payment of Gratuity Act, 1972 was enacted and brought into force from 16 September 1972.Accordingly, the Central Government extended the provisions of Payment of Gratuity Act, 1972 to the educational institutions employing 10 or more persons vide the Ministry of Labour and Employment Notification No. Administrative Officer and others, AIR 2004 SC 1426, the Apex Court in its judgment dated 13.1.2004 ruled that teachers are not entitled to gratuity under the payment of Gratuity Act, 1972 in view of the fact that teachers do not answer description of definition of “employee” under section 2 (e) of the Payment of Gratuity Act, 1972.

The question of having a Central Legislation on the subject was discussed in the Labour Ministers’ Conference held in New Delhi on 24 and 25 August, 1971 as also the Indian Labour Conference held on 22 and 23 October 1971 and general consensus was reached for enacting a Central Legislation on payment of gratuity.

Further, it does not make any discrimination between casual, contract, temporary and permanent worker who has completed the prescribed period of five years continuous service as defined in section 2A ofthe Act.

The liability for payment of gratuity vests in the employer.

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AMENDMENTS TO THE PAYMENT OF GRATUITY ACT, 19722 The Payment of Gratuity (Amendment) Bill, 2009 as passed by both the Houses of Parliament has amended the definition of ‘employee’ contained in the Payment of Gratuity Act, 1972 for covering teachers in private institutions. (b) replacing the ceiling of twenty month’s wages for payment of gratuity by a monetary ceiling of Rs.50,000/- (c) making it obligatory for the employers to pay simple interest at a specified rate if the gratuity is not paid within 30 days from the date it falls due.

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The Act provides for scheme for payment of gratuity to the employees employed in factories, mines, oilfields, plantations, ports, railway companies, shops and other establishments and matters connected therewith or incidental thereto.

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