Background
The Karnataka Payment of Gratuity Rules, 1973 were notified to implement the Payment of Gratuity Act, 1972 within the State of Uttar Pradesh. These rules lay down the procedure for employers and employees in matters of gratuity, including the format for notices, timelines for applications, methods of calculation, and the role of the Controlling Authority. The purpose is to ensure uniformity and clarity in gratuity administration across establishments in Uttar Pradesh
Applicability
It shall apply to –
(a) every factory, mine, oilfield, plantation, port and railway company;
(b) 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, or were employed, on any day of the preceding twelve months;
(c) such other establishments or class of establishments, in which ten or more employees are employed, or were employed, or, any day of the preceding twelve months, as the Central Government may, by notification, specify in this behalf
Note: A shop or establishment to which this Act has become applicable shall continue to be governed by this Act notwithstanding that the number of persons employed therein at any time after it has become so applicable falls below ten.
Compliance requirement under the Rules in Accordance with the Act
The employer shall display conspicuously a notice at or near the main entrance of the establishment in bold letters in Kannada and in the language understood by the majority of the employees, specifying the name of the officer with designation authorised by the employer to receive notices under the Act or the Rules. A fresh notice shall be displayed immediately after the existing one becomes illegible or requires a change.
Form L, if the claim is found admissible; or Form M, if the claim is not found admissible.
The gratuity payable under the Act shall be paid in cash or, if so desired by the payee, in demand draft or bank cheque to the eligible employee, nominee, or legal heir. Where the payable amount is less than one thousand rupees and the payee desires, payment may be made by postal money order after deducting commission. The employer must also inform the Controlling Authority of the details of payment.
Amount of gratuity payable shall be paid within 30 days of the date of receipt of application for payment
Penalty & Punishment
U/s 9(1): Whoever, for the purpose of avoiding any payment to be made by himself under this Act or of enabling any other person to avoid such payment, knowingly makes or causes to be made any false statement or false representation shall be punishable with imprisonment for a term which may extend to six months, or with fine which may extend to ten thousand rupees, or with both.
U/s 9(2): An employer who contravenes, or makes default in complying with, any of the provisions of this Act or any rule or order made thereunder shall be punishable with imprisonment for a term which shall not be less than three months but which may extend to one year, or with fine which shall not be less than ten thousand rupees but which may extend to twenty thousand rupees, or with both
Proviso to U/s 9(2): where the offence relates to non-payment of any gratuity payable under this Act, the employer shall be punishable with imprisonment for a term which shall not be less than six months but which may extend to two years unless the court trying the offence, for reasons to be recorded by it in writing, is of opinion that a lesser term of imprisonment or the imposition of a fine would meet the ends of justice.
Conclusion
The Karnataka Rules provide a structured compliance framework for gratuity management, ensuring employees receive their entitled benefits in a timely manner while also guiding employers in fulfilling their statutory obligations. Proper adherence to these rules safeguards both employer accountability and employee rights.
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