UGC NET Study Notes on Payment of Gratuity Act, 1972

By Sakshi Ojha|Updated : November 15th, 2022

The topic 'Payment of Gratuity Act, 1972' is an important topic for UGC NET Labour Welfare. Candidates preparing for the UGC NET Exam Paper 2 Labour Welfare must have knowledge of this topic. We are providing the detailed Study Notes for Payment of Gratuity Act, 1972 to prepare this topic well.

Get complete UGC NET Study Notes on Payment of Gratuity Act, 1972 along with UGC NET Commerce Preparation tips, UGC NET Labour Welfare Booklist and much more in the article below.

Table of Content

What is the Payment of Gratuity Act, 1972?

The Payment of Gratuity Act, 1972 is an act to provide gratuity to the employees working in factories, oil fields, plantations, ports, etc. It extends to the whole of India. (In the case of plantations and ports, it shall not extend to the state of Jammu and Kashmir). It came into effect from 16th September 1972.

Highlights of Payment of Gratuity Act, 1972

1) The Payment of Gratuity Act, 1972 shall follow to the subsequent:

  • Factory, mine, oilfield, plantation, port and Railway Company.
  • Every save or established order or some other established order notified through the primary authorities wherein ten or extra people are hired, or had been hired, on any day of the previous twelve months.

2) An worker (now no longer hired in a seasonal established order) is stated to be in non-stop carrier beneath the organisation for a duration of twelve months if the worker has labored for:

  • 190 days beneath the floor in a mine or in an established order which goes for much less than six days a week.
  • 240 days, in some other case.

3) An worker (now no longer hired in a seasonal established order) is stated to be in non-stop carrier beneath the organisation for a duration of six months if the worker has labored for:

  • Ninety-5 days, beneath the floor in a mine or in an established order which goes for much less than six days a week.
  • One hundred and twenty days, in some other case.

4) To calculate the quantity of days on which an worker has without a doubt labored beneath an organisation, the subsequent days also are considered:

  • The duration for which the worker has been laid-off beneath an settlement or through status orders made beneath the Industrial Employment (Standing Orders) Act, 1946 or the Industrial Disputes Act, 1947 or some other relevant law.
  • If the worker has been on depart with complete wages, earned withinside the preceding year.
  • Absent because of transient disablement resulting from coincidence bobbing up out of and withinside the path of his employment.
  • In the case of a woman worker, the duration of maternity depart.

5) An worker (hired in a seasonal status quo) is stated to be in non-stop provider beneath the corporation for a length of twelve months or six months if he has in reality labored for now no longer much less than seventy-5 percentage of the variety of days on which the status quo changed into in operation for the duration of such length.

6) The suitable authorities shall hire any officer as a controlling authority (Section 3), who will be accountable for the management of this act.

7) Under the Payment of Gratuity Act, 1972, gratuity will be payable to an worker at the termination of his employment on the subsequent grounds after he has rendered non-stop provider for now no longer much less than 5 years- Superannuation Retirement or resignation, Death or disablement because of coincidence or disease.

8) If the termination of the employment is because of loss of life or disablement, 5 years of non-stop provider shall now no longer be necessary. In the case of loss of life of the worker, gratuity payable to him will be paid to his nominee. If no nomination has been made, it will be payable to his heirs.If the nominee or inheritor is a minor, the percentage will be deposited withinside the financial institution or economic group via way of means of the controlling authority.

9) The corporation shall pay gratuity to an worker on the price of:

  • Fifteen days wages for each finished yr of provider.
  • Average of the entire wages obtained for a length of 3 months, withinside the case of piece rated employees (Overtime wages aren't considered).
  • Seven days wages for every season, withinside the case of seasonal employees.10) Section 4A of the act is concerning the availability of obligatory coverage to the employees.
  • If an corporation fails to make any coverage top class fee or fails to make a contribution to an accepted gratuity fund, he will be at risk of pay the gratuity amount (which include hobby for not on time payments) to the controlling authority.
  • If any character contravenes the above provisions, he will be punishable with a most excellent of 10000 rupees and a excellent of 1 thousand rupees for every day, withinside the case of a persevering with offense.

10) Section 4A of the act is regarding the provision of compulsory insurance to the employees.  

  • If an employer fails to make any insurance premium payment or fails to contribute to an approved gratuity fund, he shall be liable to pay the gratuity amount (including interest for delayed payments) to the controlling authority.
  • If any person contravenes the above provisions, he shall be punishable with a maximum fine of ten thousand rupees and a fine of one thousand rupees for each day, in the case of a continuing offence.

11) Inspectors (Section 7A) shall be appointed by the appropriate government for the purposes of this act.

12) Any person who makes false statements or false representations to avoid any payment to be paid by himself or any person under this act shall be punishable with a maximum imprisonment of six months or with a maximum fine of ten thousand rupees or with both.

  • Any employer who contravenes any provisions of this act shall be punishable with imprisonment for a term which shall not be less than three months but may extend to one year, or with fine which shall not be less than ten thousand rupees but may extend to twenty thousand rupees, or with both.
  • If the offence is related to the non-payment of any gratuity, then the employer shall be punishable with imprisonment for a term which shall not be less than six months but may extend to two years or lesser term of imprisonment or the imposition of a fine decided by the court.

Best Books to Prepare for UGC NET Labour Welfare 

Serial No.

List of best books for Labour Welfare

1

Trueman's UGC NET HRM/Human Resource Management & Labour Welfare

2

Human Resource Management by Biju Varkkey, Gary Dessler

3

Industrial Relations, Trade Unions and Labour Legislation by P.R.N. Sinha, Indu Bala Sinha

4

International Human Resource Management by Edwards and Rees

5

Human Resource Management by K Aswathappa

6

Human Resource Management by Stephen P. Robbins

7

Industrial Relations and Labour Laws by S C Srivastava

8

Organizational Behaviour by Stephen P. Robbins, Timothy A. Judge

How to Prepare for UGC NET Paper 2 Labour Welfare?

Candidates preparing for UGC NET Exam as Labour Welfare for paper 2 have to prepare every topic from the syllabus very carefully. Below are some tips to Crack UGC NET Labour Welfare Exam. 

  • All the applicants are also advised to solve as many UGC NET Previous Year Papers as possible. Previous Year Papers give you an idea of what to expect in the examination, it prepares you for the types of questions asked in the examination. 
  • UGC NET Mock Tests are also proven to be a great tool for preparation.
  • Maintain a proper schedule for the preparations. 
  • Make weekly and monthly goals and try to adhere to them. 
  • Keep making short notes of the topics, they will help you in quick revision at last.

Also Read: 

Best Books for UGC NET Paper 2Read Here
Preparation Tips for UGC NETRead Here
UGC NET 3 month study planRead Here
UGC NET 6 month study planRead Here

Thanks!

Team, BYJU'S Exam Prep. 

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FAQs

  • The Payment of Gratuity Act, 1972 is an act to provide gratuity to the employees working in factories, oil fields, plantations, ports, etc. It extends to the whole of India. (In the case of plantations and ports, it shall not extend to the state of Jammu and Kashmir). It came into effect on 16th September 1972.

  • The Payment of Gratuity Act, 1972 shall apply to the following:

    • Factory, mine, oilfield, plantation, port and Railway Company.
    • Every shop or establishment or any other establishment notified by the central government in which ten or more persons are employed, or were employed, on any day of the preceding twelve months.
    • All the applicants are also advised to solve as many UGC NET Previous Year Papers as possible. Previous Year Papers give you an idea of what to expect in the examination, it prepares you for the types of questions asked in the examination. 
    • UGC NET Mock Tests are also proven to be a great tool for preparation.
  • Under the Payment of Gratuity Act, 1972, gratuity shall be payable to an employee on the termination of his employment on the following grounds after he has rendered continuous service for not less than five years:

    • Superannuation
    • Retirement or resignation.
    • Death or disablement due to accident or disease.
  • The employer shall pay gratuity to an employee at the rate of:

    • Fifteen days wages for every completed year of service.
    • Average of the total wages received for a period of three months, in the case of piece rated employees (Overtime wages are not considered).
    • Seven days wages for each season, in the case of seasonal employees.

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