Page 141 - DMGT306_MERCANTILE_LAWS_II

Mercantile Laws – II

Notes Questions:
1. As Amaranth is a semi-literate person, he doesn’t comprehend a structured
communications in written English or written Hindi. He can read only Konkani
though he understands Hindi in verbal communication. According to you what
would be the most suitable method of recording his consent at all required instances
during construction/implementation of his Financial Plan in this situation?
2. Critically analyse the above case.

Source: http://www.fpsb.co.in/Upload/CFPSampleQPaper/Case%20Studies6.pdf

7.7 Summary

 Gratuity is a sort of retiring benefit to the workmen who have rendered long and
unblemished service to the employer.
 The main object of this Act is to provide for a scheme for the payment of Gratuity to
employees engaged in different prescribed establishments.
 The Act is applicable to every factory, shop or an establishment, in which ten or more
persons are employed, or were employed on any day of the proceeding twelve months.

 Different provisions of the Act covers payment of gratuity, reduction and forfeiture of
gratuity, recovery of gratuity, compulsory insurance, nomination, inspectors and his power,
appropriate Government power.
 Moreover under Section 7(4) (a) dispute regarding gratuity, under section 7 of Procedure
of Determination of Gratuity and under Section 4 and 7 of Payment of Gratuity are provided.
 The meaning of gratuity is a sort of retiring benefit to the workmen who have rendered
long and unblemished service to the employer.

 The Payment of Gratuity Act, 1972 was passed as Act No: 30 of 1972 and received the assent
of the President of India on August 21, 1972. It was enforced with effect from September 16,
1972.

 This Act extends to the whole of India. Of course so far as this act relates to plantation or
port, it shall not extend to the State of Jammu and Kashmir.

 A shop or establishment to which the Act has become applicable shall continue to be
governed by the Act even if the number of persons employed falls below 10 at any
subsequent stage.
 Each employee is required to nominate one or more member of his family, as defined in
the Act, who will receive the gratuity in the event of the death of the employee.

7.8 Keywords

Authority: Institutionalized and legal power inherent in a particular job, function, or position
that is meant to enable its holder to successfully carry out his or her responsibilities.
Completed Year of Service: The term 'completed year of service' means continuous service for
one year.
Employer: A legal entity that controls and directs a servant or worker under an express or
implied contract of employment and pays (or is obligated to pay) him or her salary or wages in
compensation.

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