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Q. Human Resource / Employment

Would want to know if I am eligible for Gratuity?
I am working for a non profit organisation where there are 2 paid employees and 10 unpaid directors. I have recently put in my papers after completing 5 years and 1 month of service with the organisation. Will I be eligible for Gratuity in my case?
Also what should my next step be if the organisation refuses to pay gratuity to me. Thanks.
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Showing 1 of 1 Responses

A. 1) The Payment of Gratuity Act 1972 applies to the whole of India and so far as it relates to ports and plantations it does not apply to the State of Jammu and Kashmir.

2) It applies 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 establishment in a State, in which 10 or more persons are or were employed on any day in the preceding 12 months.

(c) Such other establishments or class of establishment, in which 10 or more employees are or were employed on any day in the preceding 12 months, as the Central Government may notify in this behalf.

3) Any shop or establishment shall continue to be governed by the Act even if the no. of its employees comes below 10 persons at any time in the future.

Applicability to NGOs

4) Public charitable and religious trusts are also covered by this Act, provided that they are shops or establishments within the meaning of the Shops and Establishment Act applicable to their area of operation and that 10 or persons have been employed by them on any day in the preceding 12 months.

5) A division bench ruled that merely because an NGO, which is registered as a society, is run with the aid of the government it will not be exempted from the definition of industry.

Thanks
Adv. Shreyash Mohta

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Shreyash Mohta

Experience: 1 Year(s)

Responded 1 week ago

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Anonymous

Replied 1 week ago

My question is in an organisation where there are 2 paid employees and 10 un paid directors who have come together to form the association; in such a set up is Gratuity applicable?

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Shreyash Mohta

Experience: 1 Year(s)

Replied 1 week ago

The terminology used int he gratuity act is "ten employees" no where does it mention that the employees shall be paid or not.
Given the circumstance your organisation shall be liable to pay gratuity.

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