Short Title, Extent and Application

• This act may be called the Payment of Gratuity Act, 1972.
• It extents to the whole of India:
  provided that in so far as it relates to plantations or ports, it shall not extends to the state of Jammu and Kashmir.

It shall apply to -

• Every factory, mine, oilfield, plantation, port, and railways company ;
• Every shop or establishment within the meaning of any law for the time being in force in relation to shops and establishments in a State, in which ten or more persons are employed, on any day of the preceeding twelve months;
• Such other establishments or class of establishments, in ehich ten or more employees are employed, or were employed, on any day of the preceeding twelve months, as the Central Government may, by notification, specify in this behalf.
• It shall come into force on such date as the Central Government may, by notification, appoint.

Introduction
The law relating to payment of gratuity is governed by the following Act/Rules:

• Payment of gratuity Act, 1972
• Payment of Gratuity (Central) Rules, 1972

Objective of the Act
The objective of the act is to provide for a scheme for the payment of gratuity to employees engaged in factories, mines, oilfields, plantations, ports, railway companies, shops or other establishments and for matters connected therewith or incidental thereto. The significance of this legislation lies in the acceptance of the principle of gratuity as a compulsory, statutory retrial benefit.

Applicability of the Act
The act is applicable to :

• Every factory, mine, oilfield, plantation, port and railway company.
• Every shop or establishment within the meaning of any law for the time being in force in relation to shops and establishments in a state, in which ten or more persons are employed on any day of the preceding twelve months.
• Other establishments or class of establishments, in which ten or more employees are employed or were employed, on any day of the preceding twelve months, as the central government may notif

Obligations of the Employer

• Registration with controlling Authority.
• Obtaining Insurance Policy
• Obtaining nominations
• Liability for Payment of Gratuity
• Settlement of Gratuity Liability
• Submission of notices
• Display of notice
• Claims against the employer

Offences & Penalties
Penalties for certain offences-Any employer who :

• Incase of failure on the part of the employer to pay insurance premium or contribute to gratuity fund, the employer shall be liable to pay the amount gratuity together with interest to the controlling authority. In case of failure to deposit the money with the controlling authority, the person shall be punishable with fine which may extend to ten thousand rupees and in case of continuing offence with a further fine which may extend to one thousand rupees for each day during which the offence continues