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It was brought into force with effect from the 16.9.1972 vide S. No.601 (E) dated 16.9.1972 and it extends to whole of India.The Act has been recently extended to the State of Sikkim w.e.f. The Act provides for payment of gratuity to employees employed in any factory, mine, oilfield, plantation, port, Railway Company and in any shop or establishment employing ten or more workers.The Payment of Gratuity Act, 1972 was made applicable to local bodies with effect from 8.1.1982.
The observations of the Supreme Court are as follows:- “Our conclusion should not be misunderstood that teachers although engaged in very noble profession of educating our young generation should not be given any gratuity benefit.
That is the subject matter solely of the Legislature to consider and decide”.
Keeping in view the observations of the Supreme Court as mentioned above the definition of “employee” under section 2(e) in the existing Act has been proposed to be widened in keeping with the spirit of the Act.
However, the employees of other educational institutions were facing denial of gratuity as they were not covered under the Act.
The employees of the Government schools are already entitled to gratuity under the extant rules of the Government governing gratuity and pension but the employees of the private schools were having no legal entitlement to gratuity. The Notification came into force w.e.f 19.4.1997, date when it was published in the Gazette of India.