Application of The Act

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Application of The Act

Application of the act, Payment of Gratuity Act, 1972. It is applicable to every plantation, port, factory, oilfield, mine, and railway company. Also, involves every shop, factory or establishment. Within the meaning of any law stating: on any day of the preceding twelve months. in which ten or more persons are employed, or were employed.

Although, according to the Payment of Gratuity Act, 1972. An employee is only eligible to receive gratuity when he has rendered a five years continuous service with an organisation. This gratuity is payable to the employee on his retirement from the work or the superannuation.

Also, such other establishments or class of establishments. on any day of the preceding twelve months, where ten or more employees are employed or were employed. Although the Central Government may specify in this behalf by notification. Once the Act’s applicability is done, to an organization i.e. once more than 10 employees are hired by an establishment. The Act would continue to apply to the same, even if the number of employees starts reducing below the minimum requirement. Excluding the State of Jammu and Kashmir, the Act extends to the whole of India.

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