Payment of Gratuity act

Arrangement of Sections

1. Short title.

PART I

2. Employer's liability to pay gratuity to workmen employed on lands that vested in the Land Reform Commission.

3. Rate of payment of a gratuity.

4. Commissioner to issue certificate to the Land Reform Commission specifying the sum due as gratuity to a workman.

PART II

5. Employers liability to pay gratuity to his workmen for termination after the coming into operation of this Act.

6. Rate of payment of gratuity.

7. Limits on applicability of section 5.

7A. Payment of gratuity to workmen of Public Corporations or Government Owned Business undertakings converted into public companies.

7B. Rules.

7C. Special Provisions relating to workmen in certain companies.

PART III

GENERAL

8. Recovery of gratuity on defaulter's failure to pay.

9. Persons to whom gratuity shall be paid in certain circumstances.

10. Gratuity to be computed favourable.

11. Power of Commissioner and other officer to enter and inspect premises.

12. Power of Commissioner to call for registers and records.

13. Forfeiture of gratuity.

14. Present employer to count services of workman under past employer in certain circumstances.

15. Offences.

16. Where the accused proves that some other person is guilty of the offence.

17. Amendment of Chapter 131.

18. Amendment of the Land Reform Law.

19. Amendment of Chapter 460.

20. Interpretation.

12 of 1983,

41 of 1990,

62 of 1992.

AN ACT to provide for the Payment or a Gratuity by employers to their workmen, for the amendment of the Land Acquisition Act, the Land Reform Law and the Industrial Disputes Act, and for matters connected therewith or incidental thereto.

[Date of Commencement: 18th March, 1983]

1. Short title.

This Act may be cited as the Payment of Gratuity Act.

PART I

2. Employer's liability to pay gratuity to workmen employed on lands that vested in the Land Reform Commission.

(1) Every employer who has employed a workman on any agricultural land or estate land that vested in the Land Reform Commission by the operation of the Land Reform Law or on any land acquired under the Land Acquisition Act on or after May 29, 1971, and deemed to have been vested in the Land Reform Commission in terms of subsection (1) of section 21 of the Land Reform (Special Provisions) Act, No. 39 of 1981, for a period of not less than five completed years immediately prior to such vesting or such acquisition as the case may be, shall pay to that workman in respect of his services, or in the event of the death of that workman to his heirs, a gratuity computed in accordance with the provisions of this Part, within a period of thirty days of the coming into operation of this Act:

Provided however, that the preceding provisions shall not apply in respect of the portion or portions of the agricultural land such employer is allowed to retain in terms of
subsection (1) of section 19 of the Land Reform Law.

(2) The provisions of subsection (1) shall be deemed to have come into force on August 26, 1972.

(3) The liability imposed on an employer by
subsection (1) shall, in the event of the death of the employer on or after August 26, 1972, and before that liability is discharged, be discharged by his legal representative.

(4) The provisions of this Part shall not apply to or in relation to a workman who is an Indian repatriate to whom the provisions of the Emergency (Payment of Gratuities and other Monetary Benefits to Indian Repatriates) Regulations made under section 5 of the Public Security Ordinance applied or the Payment of Gratuities and other Monetary Benefits to Indian Repatriates, (Special Provisions) Law, No. 34 of 1978, applies.

3. Rate of payment of a gratuity.

(1) A workman employed as a labourer—

(a) shall be entitled to the payment of a gratuity under section 2, in a sum equivalent to fourteen days' wage or salary for each year of completed service prior to the, commencement of his liability to contribute to, the Employees Provident Fund computed at the rate of wage or salary paid or that would have been paid to such workman in the month of November, 1959; and

(b) shall be entitled to the payment of a gratuity under section 2, in a sum equivalent to seven days' wage or salary for each year of completed service subsequent to the commencement of his liability to contribute to the Employees' Provident Fund computed in the same manner as in paragraph (a), of this subsection.

(2) Where a workman is employed in any capacity other than as a labourer, he shall be entitled to the payment of a gratuity under section 2, computed at the rate of a sum equivalent to one month's gross wage or salary of that workman for each year of completed service—

(i) if that workman was employed on any agricultural land that vested in the Land Reform Commission on August 26, 1972, based on the gross rate of wage or salary, that would have been paid for the month of August, 1972, if he had worked, for the whole of that month,

(ii) if that workman was employed on any estate land that vested in the Land Reform Commission on October 17, 1975, based on the rate of wage or salary that would have been paid for the month of October, 1975, if he had worked for the whole of that month,

(iii) if that workman was employed on any land that was acquired under the Land Acquisition Act, based on the rate of wage or salary that would have been paid for the month in which such land was acquired,

if he had worked for the whole of that month, less the employer's contribution to the Employees' Provident Fund,, or to an approved provident fund or to any pension fund in respect of that workman for the period up to August 26, 1972, where that workman is a workman referred to in paragraph (i) of this subsection, or October 17, 1975, where that workman is a workman referred to in paragraph (ii) of this subsection, or, up to the date of such, acquisition where that workman is a workman referred to in paragraph (iii) of this subsection.

(3) Where an employer has paid a gratuity in respect of the services of a workman in accordance with the order of a labour tribunal or an award or settlement under the Industrial Disputes Act that employer, shall not be liable to pay in respect of .such services a gratuity under this Part.

4. Commissioner to issue certificate to the Land Reform Commission specifying the sum due as gratuity to a workman.

(1) Notwithstanding the provisions of any other law, where any land on which a workman to whom the provisions of this Act apply was employed, has vested in the Land Reform Commission under the Land Reform Law or is deemed to have so vested, the Commissioner shall, after' such inquiry as he may deem necessary; issue a certificate specifying the sum due as gratuity to that workman from that employer in respect of his services under that employer prior to the date of such vesting or acquisition.

(2) Where the Commissioner issues a certificate under subsection (1) specifying the sum due as gratuity to a workman from his employer, the Land Reform Commission shall, subject to the provisions of subsection (1) of section 6 make payment of such sum to the workman through the Commissioner.

(3) A copy of the certificate referred to in subsection (1) shall be, sent by the Commissioner to the employer of the workman in respect of whom the certificate is issued.

(4) The sum paid by the Land Reform Commission to a workman under this section or the sum remitted in accordance with the provisions of subsection (1) of section 6, shall be a first charge on the compensation payable to the, employer of that workman under section 32 or section 42J of the Land Reform Law and that sum shall be from the amount of compensation awarded to employer.

PART II

5. Employers liability to pay gratuity to his workmen for termination after the coming into operation of this Act.

(1) Every employer who employs or has employed fifteen or more workmen on any day during the period of twelve months immediately preceding the termination of the services of a workman in any industry shall, on termination (whether by the employer or workman, or on retirement or by the death of the workman, or by operation of law, or otherwise) of the services at any time after the coming into operation of this Act, of a workman who has a period of service of not less than five completed years under that employer, pay to that workman in respect of such services, and where the termination is by the death of that workman, to his heirs, a gratuity computed in accordance with the provisions of this Part within a period of thirty days of such termination.

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