Compliance Requirements under the Rules in Accordance with the Code

1. Form VI: Notice for payment of Gratuity in Gujarat (Section 56, Rule 7(2))

Within 15 days of receipt of an application for payment of gratuity, the employer shall issue the notice to the concerned employee in Form VI:If the claim is found admissible/If the claim is not found admissible. In the case of denial of gratuity a copy of the notice) shall be endorsed to the Director General, Labour Bureau

2. Payment of Gratuity in Gujarat (Section 53(1) – Rule 33)

Gratuity is payable to an employee on termination of employment after five years of continuous service in cases of

a) superannuation, b) retirement or resignation, c) death or disablement due to accident or disease, d) end of a fixed-term contract, or e) any event notified by the Central Government

1) In case of working journalists, 5 years shall be deemed to be 3 years

2) Completion of 5 years not necessary where termination of employment is is due to death/disablement/expiry of fixed term of employment/happening of notified event

3) In case of death, gratuity payable to him shall be paid to nominee/heirs, if no nomination made. In case nominee/heir is a minor, gratuity shall be deposited with notified authority who shall invest the same in term deposit with the State Bank of India or Nationalised Bank, until such minor attains majority

4) Employee on fixed term employment shall be eligible for gratuity, if he renders service under the contract for a period of one year and he shall be paid gratuity at the rate of fifteen days’ wages, based on the rate of wages last drawn by him, for every completed year of service or part thereof in excess of six months.

4. Computation of Gratuity payable (Section 53(2),(3),(4),(5))

Employers are required to pay gratuity to employees for every completed year of service or part thereof in excess of six months, with the rate set at fifteen days’ wages or such number of days as notified by the Central Government, based on the employee’s last drawn wage.

i) For a piece-rated employee, daily wages are computed based on the average total wages from the three months preceding employment termination, excluding overtime.

ii) Seasonal employees receive gratuity at seven days’ wages per season.

iii) Employees on fixed-term contracts or deceased employees receive gratuity on a pro-rata basis.

iv) Amount of gratuity not to exceed amount notified by Central Government

v) For computing gratuity for an employee who is employed on reduced wages after disablement, the wages before disablement are considered as received during that period, and the wages after disablement are considered as reduced

vi) Nothing in this section shall affect the right of an employee to receive better terms of gratuity under any award or agreement or contract with the employer

vii) For monthly rated employee, the fifteen days’ wages shall be calculated by dividing the monthly rate of wages last drawn by him by twenty-six and multiplying the quotient by fifteen

5. Forfeiture of Gratuity in Gujarat (Section 53(6), 54)

a) Gratuity for employee terminated for causing damage/loss/destruction of employer property shall be forfeited to extent of damage/loss

b) Gratuity may be wholly/partially forfeited if employee is terminated for -riotous/disorderly conduct/act of violence -committing offense involving moral turpitude

(A) An employee is in continuous service if uninterrupted, including interruptions due to sickness, accident, leave, absence without leave, lay-off, strike, lock-out, or cessation of work not caused by the employee.

(B) An employee (not employed in seasonal establishment) who is not in continuous service as per

(A) is deemed in continuous service if, in the preceding year or six months, they worked:

(a) For one year: at least 190 days (below ground or <6-day workweek) or 240 days (others).

(b) For six months: at least 95 days (below ground or <6-day workweek) or 120 days (others).

(C) In a seasonal establishment, an employee who is not in continuous service as per (A),for any period of one year or six months, is deemed to be in continuous service if they worked at least 75% of the operational days in the period.

6. Form IV: Nomination Form for Gratuity in Gujarat (Section 55, Rule 6)

Employees to submit a nomination in Form IV in duplicate either in person with a receipt, by regd. post or electronically:

1) Nomination submitted after specified period will not be invalid

2) Employer to get service particulars of employee in Form verified with his records within 30 days of receipt of Form IV and return a duly stamped copy of the form to employee and other copy shall be recorded

3) Employee having no family shall within 90 days of acquiring a family submit a fresh nomination and point (2) shall apply as it is

4)Modification of nomination to be submitted in Form IV

5) Form IV to be signed by employee or bear thumb impression in case of illiterate person

6) A nomination/fresh nomination/notice of modification of nomination shall take effect from date of receipt thereof by employer

7) An employee may, in his nomination, distribute amount of gratuity payable to him under this Chapter amongst more than one nominee

8) If an employee has a family, the nomination must be made in favour of one or more family members. Any nomination favouring a non-family member is void

7. Form V: Notice for payment of Gratuity by Employer (Section 56, Rule 35(2) Code on Social Security (Central) Rules, 2020)

Within 15 days of receiving a gratuity application, the employer must verify the claim and issue Form-V either approving gratuity with payable amount and payment date (within 30 days of application) or rejecting it with reasons, and send a copy of rejection to the competent authority.

1) If the date of superannuation or retirement is known, the employee may apply for gratuity thirty days in advance

2) An employee on a fixed-term contract is eligible for gratuity after one year of service, paid at fifteen days’ wages per completed year or part thereof beyond six months

3) A nominee eligible for gratuity must apply in Form-V within thirty days from when gratuity becomes payable. Applications on plain paper with relevant details are also accepted

4) A legal heir eligible for gratuity must apply in Form-V within one year from when gratuity becomes payable

5) For gratuity payable before these rules, the limitation periods start from the rules’ commencement

6) Late applications are accepted if the applicant shows sufficient cause. Disputes are referred to the competent authority

7) Applications can be submitted electronically, in person, or by registered post

8. Mode of payment of Gratuity in Gujarat (Section 56, Rule 7(3))

The gratuity payable under the Code shall be paid through Demand Draft or by crediting in the bank account of the eligible employee, nominee or legal heir, as the case may be. Intimation about the details of payment shall also be given by the employer to the competent authority of the area.

9. Compulsory Insurance for Gratuity payable by Employer (Section 58)

i) Employers (excluding Central/State Government establishments) must obtain insurance for gratuity liability from the date notified by the appropriate Government.

ii) Insurance must be from an IRDAI-regulated insurer as prescribed.

iii) Different notification dates may apply to different establishments or areas.

1. 1. Employers with an approved gratuity fund, including those employing 500+ workers who establish such a fund, may be exempt under prescribed conditions.
   2. Establishments must register with the competent authority; registration allowed only if insurance is taken or an approved fund exists.
   3. Government may specify Board of Trustees structure and recovery of gratuity from insurer or fund.

vii) If premium or contribution is not paid, employer must pay gratuity with applicable interest directly.

10. Time period for keeping records under Chapter V of the Code i.e. Gratuity in Gujarat (Rule 82(2))

Records kept under the provisions Chapter V of the Code (i.e. Gratuity) and the rules framed thereunder shall be preserved for a period of two years from the date of their preparation.

11. Form XXXIII : Unified Annual Return in Gujarat (Rule 82(3))

The employer to which the provisions of Chapter V of the Code applies, on or before the 1st day of February in each year, upload a unified annual return in Form-XXXIII online on web portal of the Labour, Skill Development and Employment Department, State Government, giving information as to the particulars specified, in respect of the preceding year: Provided that during inspection, the Inspector cum-Facilitator may require the production of accounts, books, register and other documents maintained in electronic form or otherwise.