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Section 2, Payment Of Gratuity Act 1972: Definitions

Section 2 of the Payment of Gratuity Act, 1972 — 'Definitions', reads as follows:

In this Act, unless the context otherwise requires,—

  (a) "appropriate Government" means,—
    (i) in relation to an establishment—
      (a) belonging to, or under the control of, the Central Government,
      (b) having branches in more than one State,
      (c) of a factory belonging to, or under the control of, the Central Government,
      (d) of a major port, mine, oilfield or railway company, the Central Government,
    (ii) in any other case, the State Government;

(b) "completed year of service" means continuous service for one year;

(c) "continuous service" means continuous service as defined in section 2A;

(d) "controlling authority" means an authority appointed by the appropriate Government under
section 3;

(e) “employee” means any person (other than an apprentice) who is employed for wages, whether the terms of such employment are express or implied, in any kind of work, manual or otherwise, in or in connection with the work of a factory, mine, oilfield, plantation, port, railway company, shop or other establishment to which this Act applies, but does not include any such person who holds a post under the Central Government or a State Government and is governed by any other Act or by any rules providing for payment of gratuity;

(f) “employer” means, in relation to any establishment, factory, mine, oilfield, plantation, port, railway company or shop—
 (i) belonging to, or under the control of, the Central Government or a State Government, a person or authority appointed by the appropriate Government for the supervision and control of employees, or where no person or authority has been so appointed, the head of the Ministry or the Department concerned,
 (ii) belonging to, or under the control of, any local authority, the person appointed by such authority for the supervision and control of employees or where no person has been so appointed, 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 establishment, factory, mine, oilfield, plantation, port, railway company or shop, and where the said affairs are entrusted to any other person, whether called a manager, managing director or by any other name, such person;

(g) “factory” has the meaning assigned to it in clause (m) of section 2 of the Factories Act, 1948 (63 of 1948);

(h) “family”, in relation to an employee, shall be deemed to consist of—
 (i) in the case of a male employee, himself, his wife, his children, whether married or unmarried, his dependent parents and the dependent parents of his wife and the widow and children of his predeceased son, if any,
 (ii) in the case of a female employee, herself, her husband, her children, whether married or unmarried, her dependent parents and the dependent parents of her husband and the widow and children of her predeceased son, if any:

Explanation.—Where the personal law of an employee permits the adoption by him of a child, any child lawfully adopted by him shall be deemed to be included in his family, and where a child of an employee has been adopted by another person and such adoption is, under the personal law of the person making such adoption, lawful, such child shall be deemed to be excluded from the family of the employee;

(i) “major port” has the meaning assigned to it in clause (8) of section 3 of the Indian Ports Act, 1908 (15 of 1908);

(j) “mine” has the meaning assigned to it in clause (j) of sub-section (1) of section 2 of the Mines Act, 1952 (35 of 1952);

(k) “notification” means a notification published in the Official Gazette and the expression “notified” shall be construed accordingly;

(l) “oilfield” has the meaning assigned to it in clause (e) of section 3 of the Oilfields (Regulation and Development) Act, 1948 (53 of 1948);

(m) “plantation” has the meaning assigned to it in clause (f) of section 2 of the Plantations Labour Act, 1951 (69 of 1951);

(n) “port” has the meaning assigned to it in clause (4) of section 3 of the Indian Ports Act, 1908 (15 of 1908);

(o) “prescribed” means prescribed by rules made under this Act;

(p) “railway company” has the meaning assigned to it in clause (5) of section 3 of the Indian Railways Act, 1890 (9 of 1890);

(q) “retirement” means termination of the service of an employee otherwise than on superannuation;

(r) “superannuation”, in relation to an employee, means the attainment by the employee of such age as is fixed in the contract or conditions of service as the age on the attainment of which the employee shall vacate the employment;

(s) “wages” means all emoluments which are earned by an employee while on duty or on leave in accordance with the terms and conditions of his employment and which are paid or are payable to him in cash and includes dearness allowance but does not include any bonus, commission, house rent allowance, overtime wages and any other allowance.





Extra Notes for Readers

(1) Clause (c) was substituted for earlier clause (c) and the Explanations by Act 26 of 1984, s. 3 (w.e.f. 18-May-1984).

(2) Clause (e) was substituted for earlier clause (e) by Act 47 of 2009, s. 2 (w.e.f. 3-Apr-1997).

(3) In sub-clause (i) of clause (h), the words for “and the dependent parents of his wife and the widow” were substituted for the words for “and the widow” by Act 22 of 1987, s. 2 (w.e.f. 1-Oct-1987).

(4) In sub-clause (ii) of clause (h), the proviso was omitted by Act 22 of 1987, s. 2 (w.e.f. 1-Oct-1987).

(5) Clause (k) was substituted for earlier clause (k) by the Payment of Gratuity (Amendment) Act, 2018 (12 of 2018), s. 2 (w.e.f. 29-Mar-2018).

(6) Clause (r) was substituted for earlier clause (r) by Act 25 of 1984, s. 2 (w.e.f. 1-Jul-1984).





This page was last updated on 29th March 2018.

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