Page 266 - DMGT516_LABOUR_LEGISLATIONS

Unit 10: Provident Fund and Gratuity Payment Acts

The gratuity should be paid in cash, or by Demand Draft or cheques. If the amount of gratuity is Notes
less than 1000/-, then it may be paid by postal money order, at the desire of the payee. Details
of payment of gratuity should be intimated by the employer to the controlling authority Assistant
Labour Commissioner (Central) of the area.

10.8.2 Forfeiture

If the services of an employee have been terminated for any act of willful omission or negligence
causing any damage or loss to, or destruction of, property belonging to the employer, his
gratuity can be forfeited to the extent of the damage or loss so caused to the employer. The
gratuity payable to an employee can be wholly forfeited, if the services of such employee have
been terminated for his riotous or disorderly conduct or any other act of violence or an offence
involving moral turpitude committed by him in the course of his employment.
Section 4(6) provides as under:-
"Notwithstanding anything contained in sub-section (1)
(a) The gratuity of an employee, whose services have been terminated for any act, willful
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."
The Gratuity Act also provides that the employees' right to receive better terms of gratuity
under any Award/Settlement/Regulation with the employer shall be protected. The bank
employees/officers should, therefore, be paid higher amount of the gratuity payable either
under the Act or Award /Settlement/Officers' Service Regulations.

Did u know? The limit on maximum amount of gratuity exempt from the income-tax has
been raised from 1, 00000 to 3, 00000 w.e.f. 1.4.1995 vide Notification No. 9959.

10.8.3 Nomination

1. An employee who has completed one year of service has to name his/her nominee in the
prescribed form. An employee in his nomination can distribute the amount of gratuity
amongst more than one nominee.
2. If an employee has a family at the time of making the nomination, it has to be made in
favour of one or more members of the family.
3. If nomination is made in favour of a person who is not a member of his family, the same
is void. However, if the employee has no family at the time of making a nomination, he
can make the nomination in favour of any person.
4. If such employee acquires a family subsequently, then such nomination becomes invalid
forthwith, and the employee has to make a fresh nomination in favour of one or more
members of his family.

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