Aims and Objects of the Act under The Payment of Gratuity Act, 1972 :

The Payment of Gratuity Act, 1972 was laid down to provide for a uniform scheme for payment of gratuity to employees through out the country. Earlier there was no Central Act to regulate the payment of Gratuity to the workers .The bill was drafted on the basis of the West Bengal Employees’ Payment of Gratuity Act, 1971 with some modification which was made in the light of the views expressed at the Indian Labour Conference relating to the forfeiture of gratuity in cases of dismissal for gross misconduct.

Initially, the Bill provided for gratuity to the employees drawing wages upto ` 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 diseases. 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.

In was 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 oilfield 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.

Act 39 of 1972

The Central legislation for the Payment of Gratuity was passed in the year 1972 and came into force on 16th September, 1972 as THE PAYMENT OF GRATUITY ACT, 1972 (39 of 1972). This Act was amended time to time as per requirement, the years 1984, 1987, 1994 and 1998, 2009, 2010.