LexThe Kerala Industrial Employees' Payment of Gratuity Act, 1970 (No.6 of 1970)
Kerala · state statute
Open in Lexace · Ask the AI about this actTHE KERALA INDUSTRIAL EMPLOYEES' PAYMENT OF
GRATUITY ACT, 1970
(Act 6 of 1970)
CONTENTS
Preamble.
Sections
1. Short title, extent and commencement.
2. Definitions.
3. Controlling Authority.
4. Payment of gratuity.
5. Power to exempt.
6. Nomination.
7. Application for gratuity and procedure for payme nt.
8. Recovery of gratuity amount.
9. Penalties.
10. Protection for acts done in good faith.
11. Delegation of powers.
12. Power to make rules.
13.
Repeal and Saving.
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THE KERALA INDUSTRIAL EMPLOYEES' PAYMENT OF
GRATUITY ACT, 1970 1
(Act 6 of 1970)
An Act to provide for the payment of gratuity to the employees in factories,
plantations and other establishments in the State of Kerala
Preamble.- WHEREAS it is expedient to provide for the payment of gratuity to the
employees in factories, plantations and other establishments in the State of Kerala;
BE it enacted in the Twenty-first Year of the Republic of India as follows:-
I. Short title , extent and application .- (1) This Act may be called The Kerala
Industrial Employees' Payment of Gratuity Act, 1970.
(2) It extends to the whole of the State of Keral a.
(3) It shall apply in the first instance to -
(a) any factory as defined in clause (m) of section 2 of the Factories Act, 1948
(Central Act 63 of 1948);
(b) any plantation as defined in clause (f) of section 2 of the Plantations Labour
Act, 1951 (Central Act 69 of 1951) which admeasures 10.125 hectares or more or in
which ten or more persons are employed on the date of the commencement of this Act;
(c) any establishment as defined in clause (8) of section 2 of the Kerala Shops
and Commercial Establishments Act, 1960 (34 of 1960);
(d) any establishment as defined in clause (h) of section 2 of the Beedi and
Cigar Workers (Conditions of Employment) Act, 1966 (Central Act 32 of 1966) where
ten or more persons are employed;
(e) any motor transport undertaking as defined in clause (g) of section 2 of the
Motor Transport Workers Act, 1961 (Central Act 27 of 1961):
Provided that the Government may, after giving not less than two months' notice
of its intention so to do, by notification in the G azette, apply the provisions of this Act
to any other factory, plantation, establishment or undertaking to which the provisions of
this Act as such do not apply.
2. Definitions . In this Act, unless the context otherwise requires _
1 . Published in the Gazette Extraordinary No. 63 d ated 18-02-1970.
(a) "completed year of service" means uninterrup ted service for one year and
includes service which may be interrupted by sickne ss, accident, leave, strike, lock-out
or cessation of work not due to employee's fault;
(b)"continuous service" means uninterrupted serv ice and includes service which
may be interrupted by sickness, accident, leave, st rike, lock-out or cessation of work not
due to employee's fault;
(c) "controlling authority" means the authorit y appointed by the Government
under section 3;
(d) "employee" means any person employed in any factory, plantation,
establishment or undertaking to do any skilled or u nskilled, manual or clerical or
supervisory work for hire or reward but does not include any such person-
(i) whose monthly wages exceed rupees seven hundred and fifty; or
(ii) who is subject to the Army Act, 1950, o r the Air Force Act, 1950, or the
Navy Act, 1957 or the Toddy Workers' Welfare Fund A ct, 1969 (Kerala Act 22 of
1969); or
(iii) who is employed in the police service or as an officer or other employee
of a prison;
(e) "employer" means-
(i) in relation to any factory, plantation , establishment or undertaking which
is under the control of the Government, a person or authority appointed by the
Government for the supervision and control of empl oyees or where no person or
authority is so appointed , the head of the Department;
(ii) in relation to any factory, plantatio n, establishment or undertaking under
any local authority, the person appointed by such authority for the supervision and
control of employees or where no person is so appoi nted , the chief executive officer of
the local authority;
(iii) in any other case, the person, who or the authority which has the
ultimate control over the affairs of the factory, p lantation, establishment or undertaking
and where the said affairs are entrusted to any oth er person whether called a manager ,
managing director, managing agent, superintendent or by any other name, such person;
(f) "family" means-
(i) in the case of a male employee, the wif e, children whether married or
unmarried, dependant parents of the employee and th e widow and children of a deceased
son of the employee;
(ii) in the case of a female employee, the husband and children of the
employee, dependant parents of the employee or of t he husband and the widow and
children of a deceased son of the employee;
Provided that if a female employee by notice in wri ting to the controlling
authority expresses her desire to exclude her husba nd from the family, the husband and
his dependant parents shall no longer be deemed to be part of the employee's family for
the purposes of this Act unless the employee subseq uently cancels in writing any such
notice;
Explanation.- In either of the above two cases, if the child of an employee has
been adopted by another person and if under the per sonal law of the adopter, adoption is
legally recognized, such child shall be considered as excluded from the family of the
employee;
(g) "prescribed" means prescribed by the Govern ment by rules made under this
Act;
(h) "retirement" means termination of the servi ces of an employee for any
cause, but does not include superannuation;
(i) "superannuation" means termination of the s ervices of an employee by the
employer when the employee reaches the age of sixty years or such other age, if any,
fixed in the contract of service;
(j) "wages" means all remuneration capable of b eing expressed in terms of
money, which would, if the terms of employment ex pressed or implied, were fulfilled,
be payable to an employee in respect of his employm ent, or of work done in such
employment and includes-
(i) such allowances (including dearness al lowance) as the employee is for
the time being entitled to;
(ii) the value of any house accommodation or of supply of light, water,
medical attendance or other amenity or of any servi ce or of any concessional supply of
foodgrains or other articles;
(iii) any travelling concession;
but does not include bonus, commission, overtime wages and night allowance.
3. Controlling Authority.- The Government may appoint, by notification in the
Gazette, any person to be the controlling authority who shall be responsible for the
administration of this Act.
4. Payment of gratuity.- (1) Gratuity shall be payable to an employee-
(a) on his superannuation;
(b) on his retirement, resignation, retrenchme nt, discharge or dismissal from
service after completion of a minimum period of five years of continuous service;
(c) on his death or total disablement due to a ccident or disease.
Explanation.-For the purpose of this section, total disablement means such
disablement, whether of temporary or permanent natu re, as incapacitates an employee for
all work which he was capable of performing at the time of accident resulting in such
disablement.
(2) In case of death of an employee, the gratuity shall be payable to the nominee
of the employee or in the absence of a nominee to the family of the employee.
(3) In the cases referred to in clauses (a), (b) and (c) of sub-section (1), the
employer shall pay gratuity to each of his employee s at the rate of fifteen days' wages
based on the last drawn wages for every completed y ear of service or part thereof in
excess of six months:
Provided that the maximum amount of gratuity payabl e to an employee shall not
exceed fifteen months' wages:
Provided further that nothing in this section shall affect the right of any better
terms of gratuity or retirement benefits under any award or agreement or contract with
the employer:
Provided also that in the case of voluntary retirem ent or resignation from service
in any particular year, not more than five percent of the total number of employees in
the factory, plantation, establishment or undertaki ng shall be entitled to payment of
gratuity and if the number of employees who volunta rily retire or resign from service
exceeds five percent of the total number of emplo yees , the eligibility of an employee
for payment of gratuity shall be determined on the basis of the length of the service of the
employee in the factory, plantation, establishment or undertaking:
Provided further that an employee who voluntarily r etires or resigns from service
shall be eligible to claim gratuity only if one mon th's notice in writing of his intention so
to retire or resign had been given to the employer.
5. Power to exempt.- The Government may, by notification in the Gazette, and
subject to such conditions as may be specified in the notification, exempt any factory,
plantation, establishment or undertaking to which t his Act applies from the operation of
the provisions of this Act, if in the opinion of t he Government, the employees or class of
employees in any such factory, plantation, establis hment or undertaking are in receipt of
benefits superior to the benefits conferred under this Act.
6. Nomination.- (1) Each employee who has completed one year of s ervice shall
make a nomination in the prescribed form to the emp loyer conferring the right to receive
the amount payable to him under this Act in the eve nt of his death before the amount
becomes payable, or where the amount has become pay able but payment has not been
made.
(2) An employee may in his nomination distribute the amount of gratuity
payable to him under this Act amongst his nominees at his own discretion.
(3) If an employee has a family at the time of ma king a nomination, the
nomination shall be in favour of one or more person s belonging to his family. Any
nomination made by such employee in favour of a per son not belonging to his family
shall be invalid.
(4) If at the time of making a nomination the emp loyee has no family, the
nomination may be in favour of any person or perso ns but if the employee subsequently
acquires a family, such nomination shall forthwith be deemed to be invalid and the
employee shall make a fresh nomination in favour of one or more persons belonging to
his family .
(5) A nomination made under sub-section (1) may, a t any time, be modified by
an employee after giving a written notice of his in tention of doing so in the prescribed
form to the employer. If the nominee predeceases th e employee, the interest of the
nominee shall revert to the employee who shall make a fresh nomination in respect of
such interest.
(6) A nomination or its modification shall take e ffect to the extent it is valid on
the date on which it is received by the employer.
7. Application for gratuity and procedure for payment. - (1) Any employee who
is eligible for payment of gratuity under this Act shall send a written application to the
employer within such time and in such form as may be prescribed.
(2) As soon as the amount of gratuity becomes pay able the employer shall give
notice in writing to the employee and the controlling authority specifying the amount and
the employer shall arrange to pay the amount to the employee within such time as may be
prescribed.
(3) In case an employee who is eligible to get gr atuity under this Act dies before
receiving the amount of gratuity due to him, the gr atuity amount shall be paid to his
nominee or in the absence of a nominee to his family.
8. Recovery of gratuity amount.- (1) If the amount of gratuity due to an employee
from an employer under this Act is not paid by the employer within the time prescribed,
the controlling authority may, after due enquiry, b y order determine the amount and shall
issue a certificate for that amount to the Collecto r who shall recover the same as arrears
of land revenue under the provisions of the Revenu e Recovery Act for the time being in
force.
(2) For the purposes of conducting an enquiry un der sub-section (1) the
controlling authority shall have the same powers as are vested in a court for trying a suit
under the Code of Civil Procedure, 1908, in respect of the following matters, namely:-
(a) enforcing the attendance of any person or examining him on oath;
(b) requiring the discovery and production of documents;
(c) receiving evidence on affidavit;
(d) issuing commissions for the examination o f witnesses.
(3) Any enquiry under this section shall be a jud icial proceeding within the
meaning of sections 193 and 228 and for the purpos e of section 196 of the Indian Penal
Code.
(4) No order determining the amount of gratuity un der sub-section (1) shall be
made unless the employer has been given a reasonable opportunity of being heard.
(5) Any person aggrieved by an order under sub-sec tion (1) may, prefer an appeal to
the Government or any other authority as may be spe cified by the Government, within
sixty days from the date of the receipt of the order and the decision of the Government or
of such authority on such appeal shall be final.
9. Penalties.- (1) Whoever, for the purpose of avoiding any payme nt to be made by
himself under this Act or of enabling any other per son to avoid such payment knowingly
makes or causes to be made any false statement or f alse representation shall be
punishable with imprisonment for a term which may e xtend to six months or with fine
which may extend to one thousand rupees, or with both.
(2) Whoever contravenes, or makes default in comp lying with, any of the
provisions of this Act or any rules made thereunde r shall be punishable with
imprisonment for a term which may extend to three m onths or with fine which may
extend to one thousand rupees or with both.
10. Protection for acts done in good faith. No suit, or other legal proceeding shall
lie against the controlling authority or any other authority in respect of anything which is
in good faith done or intended to be done under this Act or any rules made thereunder.
11. Delegation of powers.- The Government may, by notification in the Gazette,
direct that any power exercisable by them under thi s Act or the rules made thereunder
shall be exercisable also by such other authority as they deem fit.
12. Power to make rules.- (1) The Government may, by notification in the Ga zette,
make rules for the purposes of carrying into effect the provisions of this Act.
(2) In particular and without prejudice to the ge nerality of the foregoing power
such rules may provide for-
(a) the duties, functions and powers of the c ontrolling authority;
(b) the forms to be prescribed under this Act;
(c) any other matter which is to be prescribed .
(3) Every rule made under this Act shall be laid, as soon as may be after it is
made, before the Legislative Assembly while it is in session for a total period of
fourteen days which may be comprised in one sessio n or in two successive sessions, and
if, before the expiry of the session in which it i s so laid or the session immediately
following, the Legislative Assembly makes any modif ication in the rule, or decides that
the rule shall not be made, the rule shall thereafter have effect only in such modified form
or be of no effect as the case may be; so however t hat any such modification or
annulment shall be without prejudice to the validit y of anything previously done under
that rule.
13. Repeal and Saving.- (1) The Kerala Industrial Employees' Payment of Gr atuity
Ordinance, 1969 (7 of 1969), is hereby repealed.
(2) Notwithstanding such repeal, anything done or any action taken under the
said Ordinance shall be deemed to have been done or taken under this Act as if this Act
had come into force on the 10th day of December, 1969.
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