 the payment of gratuity (amendment) bill, 1984- ~  a billfurther to amend the payment of gratuity act; 1972 short title  be it enacted by parliament in the thirty-ruth year of the republic: of india as follows:-- -1 this act may be called the payment of gratuity (amendment) act, 1984 j amendment of section 1 39 of 1972 5 2 in section 1 of the payment of gratuity act, 1972 ,(hereinafter referred to as the principal act), after sub-section (3), the following sub-section shall be inserted, namely:-"(3a) a shop or establishment to which this act has become applicable shall continue to be governed by this act notwithstanding 10 that the number of persons employed therein at any time after it has become so applicable falls below ten it 3 in section 2 of the principal act, for clause (c) and the explanations thereto, the following clause shall be substituted, namely:-amend mentof lieotion 2 '(c) "continuous service" means continuous service as defined i, in section 2a;' 4 in the principal act, after section 2, the following section shall be inserted; namely:-ituertioj1 of new section 2a "2a for the purposes of this act,-continuous servleel (1) an employee shall be said' to be in continuous service for a period if he has, for that period, been in uninterrupted service including service which may be interrupted on account of 'sickness, accident, leave, absence from duty without leave (not being absence in respect of which an order imposing 81 punishment or penalty or treating the absenoo as break in service has been passed in accordance with the standing orders, 5 rules ox regulations governing the employees of the estabushment), lay-off, strike or a lockout or cessation of work not due to any fault of the employee, whether such ~terrupted or inteltupted service was rendered before or after the commencement of this act; 10 (2) where an employee (not being an employee employed in a seasonal establishment) is not in continuous service within the meaning of clause (1), for any period of one year or six months, he shall be deemed to be in continuous service under the employer-15 (4) fox the said period of one year, if the employee during the period of twelve calendar months preceding the date with reference to which calculation is to be made, has actually worked· under the employer for not less than-(i) one hundred and ninety days, in the case of an 20 employee employed below the ground in a mine or in an establishment which worka for less than six days in a week; and (ii) two hundred and forty days, in any other case; i as (b) for the said period of six months, if the employee during the period of sbc calendar months preceding the date with reference to which the calculation is to be made, has actually worked under the employer for not less than-(i) ninety-five days, in the case of an employee so employed below the ground in a mine or in an establishment which works for less than six days in a week; and (ii) one hundred and twenty days, in any other ~; i  (3) where an employee, employed in a seasonal establiah- 35 roent, is not in continuous service within ,the meanidg of clause (1), for any period of one year or six months,he shall be deemed to be in continuous service under the employer for such period if he has actually worked for not les's than seventy-five per cent of the number of days on which the establishment was in opera- 40 uon during such period" amend-5 section 5 of the principal act shall be renumbered as sub-section ment of (1) of that section and, after sub-ilection (1) as so renumbered, the section 5 following sub-s~ion 'shall be inserted, namely:-"(2) the appropriate government may, by notification and 45' subject to such conditions as maybe specified in the noti1ication, exempt any employee or class of employees employed in any' establishment, factory, mine, oilfield, plantation, port railway company or shop to which this act applies from the owation of hal delli! ; march?2 1984 ~ai t1~-a-2~-pijb {sakat page 3, line 11~-'ill "authoriy" (to be/a£ __ jntrcduced in lok sabh a) the payment of gratuity (i>mendment) bill, 1994 ;the provisions of this' act, if, in the opmion of the appropriate government, such employee or class of employees are in receipt of gratuity or, pensionary benefits not less favourable than the benefits conferred under this act" validation 5 s the amendments made in the principal act by section 3 and section ·4 shall be deemed to have been made with e1fect from the 11th day of february, 1961 and accordingly any action or thing taken or done or purporting to have been taken or done under the principal: act on @r after the 'said date and before the commencement of this act, 10 shall, notwithstanding anything contained in any judgment, decree or order of any court tribunal or other authoriy, be deemed to be, and to have always been, for all purposes, as validly and effectively taken or done as if the said amendments had been in force at all material times explanation-for the removal of doubts, it is hereby declared that 15 no act or omission on the part of any person, before the commencement of this act, shall be punishable as an offence which would not haw been so punisha·ble if this act had not come into force the payment of gratuity act, 1972 provides for payment of gratuity ,to the employees employed in factories, mines, oilfields, !plantations, ports, railway companies, shops or other establishments and for matters connected therewith or incidental thereto 2 the supreme court had in its judgment in the case of lalappa lingappa ·vs lakshmi vishnu textile mills, sholapur (1981-1 llj 308) held that in terms of the existing definition of "continuous service" in section 2 (c) of the act, the pennanent employees were not eptitjed to payment of gratuity for the years they remained absent without leave and had actually worked for less than 240 days in a year it has been represented that the enforcement· of this ruling has resulted in denial of gratuity to a number of employees, whose short term absence had remained unregularised due to lack of appreciation of its significance for the purpose of working out their entitlement to gratuity it is, therefore now proposed to amend the definition of "continuous services" suitably and to specifically provide that a period of absence in respect of which no punishment or penalty has been imposed would not operate to interrupt the continuity of service for the purpose of payment of gratuity it is also proposed to amplify the definition of "continuous service" to provide,-'ii (a) that an employee working in an establishment which works for less than six days in a week and who is not in uninterrupted service for one year, snall be deemed to be in continuous service foot a period of one year if he has actually worked for 190 days in the 9receding year, and (b) that for determining the continuous period of six months for the purpose of payment of gratuity an employee should have completed half the number of days of actual work which constitutq "continuous service" fnr a whole year 3 opportunity is also being taken to provide that a 'shop or estabusliment once covered shall continue to be covered under the act notwitlistanc:ling that the number of persons employed therein at any time falls nelow 10 this is intended to clieek the tendency amo~g the employers to artificially reduce the number of employees so as to get out of the coverage under the act it is also proposed to provide fm grant of exemption from the operation of tlie act to any person or cla'ss of persons if they are in receipt of gratuity or pensionary beneftts not less favourable than the benefits conferred under the act 4 the bill seeks to give effect to the above proposals  new d!'lhi; veerendra patil the 9th mmch, 1984 annexure extract from the payment of gratttity act, 1972(39 of 1972) - - - - - z in this act, unless the context otherwise requires,-deftnltigns - • - - - - (c) "continuous service" means uninterrupted service and in~ eludes service which is interrupted by sickness, accident, ,leave, layoff, strike or a lock-out or cessation of work not due to any fault of the employee concerned, whether such uninterrupted or interrupt  ed service was rendered before or after the commencement of this act explanation i-in the case of an employee who is not in uuinter~ rupted service for one year, he shall be deemed to be in continuous service if he has been actually employed by an employer during the twelve months immediately preceding the year for not less than-(i) 190 days, if employed below the grounu in a mine, or (ii) 240 days, in any other case, except when he is employed in a seasonal establishment explanation ii-an employee of a seasonal establishment shall be deemed to be in continuous service if he has actually worked for not less than seventy-five per cent of the number of days on which the establishment was in operation during the year; "  - - - - -  a billfurther to amend the payment of gratuity act, 1972 (s}"ti 'veetendra pettti, minister oj labour and rehabiutgtion) 