The Payment of Gratuity Act, 1972
Querist :
Anonymous
(Querist) 09 February 2010
This query is : Resolved
The Payment of Gratuity Act, 1972
Q3. As per Section 7(3A), “If the amount of gratuity payable under sub-section (3) is not paid by the employer within the period specified in sub-section (3), the employer shall pay, from the date on which the gratuity becomes payable to the date on which it is paid, simple interest at such rate, not exceeding the rate notified by the Central Government from time to time for repayment of long-term deposits, as that Government may, by notification specify:”
Why the interest is payable from the date of on which the gratuity becomes payable? Shouldn’t it be payable after the 30days from the date of on which the gratuity becomes payable, as employer is allowed to arrange to pay the amount of gratuity within 30 days?
Raj Kumar Makkad
(Expert) 09 February 2010
because such defaulter employer should not be granted even the period of 30 days as provided to all other employer. Law is equity is available only to that person who do equity. It is penalty which has rightly been provisioned.
B K Raghavendra Rao
(Expert) 09 February 2010
If gratuity becomes payable on day 1, it has to be paid on that day. The moment employer comes to know of the date the employer is going to quit, he could well calculate the amount due using simple formula provided in the gratuity act. Therefore, no time is required for the employer to drag on payment on the grouse that gratuity amount calculation is time consuming. The employer is duty bound to pay the due amounts to his employees immediately. And therefore, this clause.
