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Graduity

(Querist) 11 June 2011 This query is : Resolved 
Dear Experts,

I have one quarry regarding graduity.

If a person died before its comnplition of 5years in services in that case his heir will be benefited by graduity amount or not. please describe it section wise and share some case study in ralavance to matter the same, Also share calculation of graduity in that type of case.

Awaiting for your reply.

Thanks & regards,

Rizwan Pathan
prabhakar singh (Expert) 11 June 2011
4. Payment of gratuity.LAYS DOWN AND READS AS FOLLOWS:

(1) Gratuity shall be payable to an employee on the termination of his employment after he has rendered continuous service for not less than five years, -

(a) on his superannuation, or

(b) on his retirement or resignation, or

(c) on his death or disablement due to accident or disease:

Provided that the completion of continuous service of five years shall not be necessary where the termination of the employment of any employee is due to death or disablement:

Provided further that in the case of death of the employee, gratuity payable to him shall be paid to his nominee or, if no nomination has been made, to his heirs, and where any such nominees or heirs is a minor, the share of such minor, shall be deposited with the controlling authority who shall invest the same for the benefit of such minor in such bank or other financial institution, as may be prescribed, until such minor attains majority.

Explanation : For the purposes of this section, disablement means such disablement as incapacitates an employee for the work which he, was capable of performing before the accident or disease resulting in such disablement.

(2) For every completed year of service or part thereof in excess of six months, the employer shall pay gratuity to an employee at the rate of fifteen days wages based on the rate of wages last drawn by the employee concerned:

Provided that in the case of a piece-rated employee, daily wages shall be computed on the average of the total wages received by him for a period of three months immediately preceding the termination of his employment, and, for this purpose, the wages paid for any overtime work shall not be taken into account.:

Provided further that in the case of [an employee who is employed in a seasonal establishment and who is riot so employed throughout the year], the employer shall pay the gratuity at the rate of seven days wages for each season.

Explanation: In the case of a monthly rated employee, the fifteen days wages shall be calculated by dividing the monthly rate of wages last drawn by him by twenty-six and multiplying the quotient by fifteen.

(3) The amount of gratuity payable to an employee shall not exceed three lakhs and fifty thousand] rupees.

(4) For the purpose of computing the gratuity payable to an employee who is employed, after his disablement, on reduced wages, his wages for the period preceding his disablement shall be taken to be the wages received by him during that period, and his wages for the period subsequent to his disablement shall be taken to be the wages as so reduced.

(5) Nothing in this section shall affect the right of an employee to receive better terms of gratuity under any award or agreement or contract with the employer.

(6) Notwithstanding anything contained in sub-section (1), -

(a) the gratuity of an employee, whose services have been terminated for any act, wilful omission or negligence causing any damage or loss to, or destruction of, property belonging to the employer, shall be forfeited to the extent of the damage or loss so caused.

(b) the gratuity payable to an employee may be wholly or partially forfeited -

(i) if the services of such employee have been terminated for his riotous or disorderly conduct or any other act of violence on his part, or

(ii) if the services of such employee have been terminated for any act which constitutes an offence involving moral turpitude, provided that such offence is committed by him in the course of his employment.
HENCE NO gratuity is payable in instant case.
Rizwan Pathan (Querist) 11 June 2011
Dear Sir,

As per amedndment the gratuity payble amount is now 10 lakh.

Regards,

Rizwan Pathan
prabhakar singh (Expert) 11 June 2011
10 lakh true,but it can be given only with completed 5 years service,and that was the question here.
Rizwan Pathan (Querist) 11 June 2011
So that means that if a person is not completed 5 years with leading to circumstances as you stated above sir then in that case it will be consider 3.5 lakh
shrikant (Expert) 16 June 2011
person died before its comnpletion of 5years in services hence his nominee or legal heir is entitle for graduity


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