Page 268 - DMGT516_LABOUR_LEGISLATIONS

Unit 10: Provident Fund and Gratuity Payment Acts

Notes

Case Study 15 Day’s Wages

he word "15 day's wages" has been interpreted differently by different judicial
authorities. Dig Vijay Woolen Mills Ltd. and Shri Mahendra Prataprai Buch appealed
Tto the court for the calculation of 15 days wages for gratuity payment. In this
appeal, the question came up how to calculate 15 days' wages for the purpose of Payment
of Gratuity in terms of Section 4(2) of the Payment of Gratuity Act. The appellant-company
calculated the amount of gratuity on the basis that fifteen days' were half of the company
wages last drawn. The respondents demanded an additional sum as gratuity on the ground
that their monthly wages should be taken as what they got for 26 working days and their
daily wages should be ascertained on that basis, but not by just taking half of the wages for
a month of 30 days, or fixing their daily wages by dividing monthly wages by 30. According
to the Supreme Court, the pattern followed by the method of 26 working days appears to
be legitimate and reasonable.
Question
Do you agree to the decision of the Supreme Court? Justify.

10.9 Summary

The Employees' Provident Funds and Miscellaneous Provisions Act, 1952 is a social welfare
legislation enacted for the purpose of institution of provident fund for employees in
factories and other establishments.
This Act provides for the institution of compulsory provident fund, family pension fund
and deposit linked insurance fund for the benefit of the employees.
Gratuity as an additional retirement benefit has been secured by labour in numerous
instances, either by agreement or by awards.
The employee and the employer or any other person raising the dispute regarding the
amount of gratuity, may make an application to the controlling authority to decide the
dispute.
Nomination once made can be modified, after giving due notice to the employer. If a
nominee predeceases the employee, a fresh nomination is required to be made.
The purpose of avoiding any payment makes any false statement or false representation
is punishable with imprisonment up to 6 months and/or fined up to 1000.

10.10 Keywords

Disablement: It is the permanent inability or reduction in the earning capacity of the workmen.
Employee: Any person who is employed for wages in any kind of work, manual or in connection
with the work of an establishment and who gets wages directly or indirectly from the employer
and includes any person employed by or through a contractor in or in connection with the work
of the establishment.
Employer: The owner or occupier of the establishment.

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