The shop had 10 workers 30 years back. After that has only 8 workers ever since. Is the shop eligible for gratuity today? I heard gratuity is not applicable for shops with less than 10 workers, but want to clarify since the shop had 10 workers before. Is a bonus also applicable in such a case?
From India, Bengaluru
1From India, Bengaluru
Dear friend,
Whenever the applicability of a Labor Law is prescribed on the minimum threshold of the number of employees employed in an establishment, the subsequent reduction in the number would not, in any way, abate its continued application is the general interpretation. It flows from the reasoning that an employment benefit once conferred by the application of a statute becomes a customary benefit which cannot be taken away.
Moreover, Sec. 1(3-A) of the Payment of Gratuity Act, 1972 explicitly lays down a caveat in this regard as follows:
" 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".
So is the position in respect of Payment of Bonus Act, 1965 too.
From India, Salem
Whenever the applicability of a Labor Law is prescribed on the minimum threshold of the number of employees employed in an establishment, the subsequent reduction in the number would not, in any way, abate its continued application is the general interpretation. It flows from the reasoning that an employment benefit once conferred by the application of a statute becomes a customary benefit which cannot be taken away.
Moreover, Sec. 1(3-A) of the Payment of Gratuity Act, 1972 explicitly lays down a caveat in this regard as follows:
" 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".
So is the position in respect of Payment of Bonus Act, 1965 too.
From India, Salem
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Brief Kerla Shop & Establishment Act.pdf
FORM C- under Shop & Commercial Establishment-1 958.xls