Payment of Gratuity Act was enacted with an objective to provide a Scheme for payment of gratuity to employees engaged in factories, mines, oilfields, plantations, ports, railway companies, shops or other establishments and matters connected therewith or incidental thereto. It is welfare legislation and intended to recognise and reward those workmen who have rendered long and faithful service to the employer.
Applicability of the Act:
This Act is applicable to all states (except Jammu and Kashmir) and particularly to every factory, mine, oilfield, plantation, port, Railways Company. It is also applicable to every shop or establishment in which ten or more employees are/ were employed on any day during the preceding 12 months. The Act continues to be applicable to any establishment or institution even if the number falls below 10 subsequent to its coverage. Central Government may by notification extend the coverage to any establishment/institution.
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