Page 239 - DCOM207_LABOUR_LAWS

Labour Laws

Notes 7. Whoever, for the purpose of avoiding any payment to be made by himself under this Act
or of enabling any other person to avoid such payment, knowingly makes or causes to be
made any false statement or false representation, shall be punishable with imprisonment
or with fine or with both. Also, if an employer contravenes or makes default in complying
with any of the provisions of this Act or any rule or order made thereunder, shall be
punishable with imprisonment or with fine or with both.

14.1.2 Objective of this Act

The main objective of this Act is to provide for a Scheme for the payment of Gratuity to employees
engaged in factories, mines, oil fields plantations, ports, railway companies, shops or other
establishments and for matter related thereof.
The objects of the Payment of Gratuity Act, 1972 are mentioned below-
(i) To provide for a Scheme for the payment of Gratuity to employees.
(ii) To provide for matters connected with or incidental to the Scheme for payment of
Gratuity.
(iii) To provide retiring benefits to employees who have rendered continuous services to his
employer and thereby contributed to his prosperity.

(iv) To define the principles of payment of gratuity according to the prescribed formula.
(v) To provide machinery for the employment of liability for payment of gratuity.

14.1.3 Applicability and Coverage of this Act

Application and Coverage of the Act to an employed person depends on two factors.
Firstly, he should be employed in an establishment to which the Act applies.
Secondly, he should be an “employee” as defined in Section 2(e).
The Act is applicable and covers the following aspects:

1. Every factory, mine, oilfield, plantation, port and Railway Company;
2. Every shop or establishment within the meaning of any law for the time being in force in
relation to shops and establishments in a state; in which 10 or more , persons are employed
or were employed on any day of the preceding 12 months;
3. To every motor transport undertaking in which 10 or more persons are employed or were
employed on any day of the preceding 12 months;
4. Such other establishments or class of establishments in which 10 or more employees
are employed or were employed on any day of the preceding 12 months, as the Central
Government may, by notification, specify in this behalf.
A shop or establishment once covered shall continue to be covered notwithstanding that the
number of persons employed therein at any time falls below 10.

Notes In exercise of the powers conferred by clause (c), the Central Government has
specified Motor transport undertakings, Clubs, Chambers of Commerce and Industry,
Inland Water Transport establishments, Solicitors offices, Local bodies, Educational
Institutions, Societies, Trusts and Circus industry, in which 10 or more persons are employed
or were employed on any day of the preceding 12 months, as classes of establishments to
which the Act shall apply.

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