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Introduction

THE PAYMENT OF GRATUITY ACT, 1972
The Working Journalists (Conditions of Service) and Miscellaneous Provisions Act, 1955 (45 of 1955) under section 5 provided for the payment of gratuity to the journalist. But there was no other Central Act which provided for the payment of gratuity to industrial workers. The Government of Kerala enacted legislation for payment of gratuity to workers employed in factories, plantations, shops and establishments. The Governor of West Bengal promulgated an Ordinance on 3rd June, 1971 wherein a scheme for payment of gratuity was enacted. The Ordinance was later replaced by the West Bengal Employees' Payment of Compulsory Gratuity Act, 1971 enacted by the President on 28th August, 1971. Gratuity was also being paid by some employers to their workers under Awards and Agreements. Since the enactment of the Kerala and West Bengal Acts, some other State Governments also wanted to enact similar measures. Taking into account the intention of the State Governments it was felt necessary to have a Central law on the subject so as to ensure a uniform pattern of payment of gratuity to the employees throughout the country. The proposal for Central legislation on gratuity was discussed in the Labour Ministers' Conference held at New Delhi on 24th and 25th August, 1971 and also in the Indian Labour Conference at its session held on 22nd and 23rd October, 1971. There was general agreement at the Labour Ministers' Conference and the Indian Labour Conference that Central legislation on payment of gratuity might be undertaken at the earliest. Accordingly the Payment of Gratuity Bill was introduced in the Parliament.
 
STATEMENT OF OBJECTS AND REASONS
There is at present no Central Act to regulate the payment of gratuity to industrial workers, except the Working Journalists (Conditions of Service) and Miscellaneous Provisions Act, 1955. The Government of Kerala enacted legislation last year for payment of gratuity to workers employed in factories, plantations, shops and establishments. The West Bengal Governor Promulgated an Ordinance on the 3rd June, 1971 prescribing a similar scheme of gratuity. This Ordinance has since been replaced by the West Bengal Employees' Payment of Compulsory Gratuity Act, 1971, enacted by the President on 28th August, 1971. Gratuity is also being paid by some employers to their workers under Awards and Agreements.
Since the enactment of the Kerala and the West Bengal Acts, some other State Governments have also voiced their intention of enacting similar measures in their respective States. It has become necessary, therefore, to have a Central law on the subject so as to ensure a uniform pattern of payment of gratuity to the employees throughout the country. The enactment of a Central law would also avoid different treatment to the employees of establishments having branches in more than one State when, under the conditions of their service, the employees are liable to transfer from one State to another.
The proposal for Central legislation on gratuity was discussed in the Labour Ministers' Conference held at New Delhi on 24th and 25th August, 1971 and also in the Indian Labour Conference at its session held on the 22nd and 23rd October, 1971. There was general agreement at the Labour Minister' Conference and the Indian Labour Conference that Central legislation on payment of gratuity might be undertaken as early as possible. It is accordingly proposed to undertake such legislation.
In enacting the President's Act for West Bengal in August 1971, care has been taken to so design its provisions that they could serve as far as possible as norms for the Central law. The Bill has, therefore, been drafted on the lines of the West Bengal Employees' Payment of Compulsory Gratuity Act, 1971 with some modifications which have been made in the light of the views expressed at the Indian Labour Conference relating to forfeiture of gratuity in cases of dismissal for gross misconduct.
The Bill provides for gratuity to employees drawing wages up to Rs. 270 per month in factories, plantations, shops, establishments and mines, in the event of superannuation, retirement, resignation and death or total disablement due to accident or disease, The quantum of gratuity payable will be 15 days' wages based on the rate of wages last drawn by the employees concerned for every completed year of service or part thereof in excess of six months subject to a maximum of 15 months' wages. The term "wages" will mean "basic wage plus dearness allowance".
It is proposed that the appropriate Government for administering the Act in relation to establishment belonging to or under the control of the Central Government or a railway company, or mine, a major port and oil field or in relation to establishments having departments or branches in more than one State, will be the Central Government, and, in relation to other establishments, the State Government. The Bill seeks to give effect to the above proposals.
 
ACT 39 OF 1972
The Payment of Gratuity Bill having been passed by both the Houses of Parliament received the assent of the President on 21st August, 1972. It came into force on 16th September, 1972 as THE PAYMENT OF GRATUITY ACT, 1972 (39 of 1972).
 
LIST OF AMENDING ACTS
1. The Payment of Gratuity (Amendment) Act, 1984 (25 of 1984).
2. The Payment of Gratuity (Second Amendment) Act, 1984 (26 of 1984).
3. The Payment of Gratuity (Amendment) Act, 1987 (22 of 1987).
4. The Payment of Gratuity (Amendment) Act, 1994 (34 of 1994).
5. The Payment of Gratuity (Amendment) Act, 1998 (11 of 1998).
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