GRATUITY RULES

1.0    Title

These rules shall be called “Sponge Iron India Limited – Gratuity Rules, 1987”.

2.0    Definitions:

In these rules, the following expressions shall unless excluded by or repugnant to their context, have the following meaning:-

a)     The “Company” shall mean Sponge Iron India Limited.

b)     “APPRENTICE” means a person who is declared to be an apprentice by the authority specified in their behalf by the appropriate Government.

c)      “CASUAL EMPLOYEE” means an employee who is engaged for work of a casual or occasional nature.

d)     “Chairman-cum-Managing Director” means the Chairman-cum-Managing Director of Sponge Iron India Limited.

e)     “COMPLETED YEAR OF SERVICE” means qualifying service for one year.

f)        “EMOLUMENTS”  for the purpose of this scheme shall mean the last pay drawn (which term includes basic pay, special pay, personal pay, non-practicing pay, dearness allowance, leave salary, subsistence grant and wages in the case of non-salaries employees) drawn immediately preceding the date of quitting service or the date of his death.  There will be no ceiling on reckonable emoluments for calculating the Gratuity.

g)     “FAMILY” shall include the following:

(i)             Wife/Husband of the employee.

(ii)           Sons including step-sons and adopted sons.

(iii)         Unmarried and widowed daughter including step children and adopted children.

(iv)          Brother below the age of 18 years and unmarried and widowed sister including step brother and step sister.

(v)            Father.

(vi)          Mother

(vii)        Married daughter and;

(viii)      Children of a pre-deceased son.

h)      “QUALIFYING SERVICE” means uninterrupted service rendered in the Company after completion of 10 years of age except for the period of service rendered as apprentice or as trainee engaged under Company training schemes.  The period shall include service which is interrupted by authorised leave and cessation of work, not due to the employee’s fault.

i)        “THE BOARD OF DIRECTORS” means the Board of Directors of the Company.

j)        “SUPERANNUATION” means the retirement of the Company’s employee from service on reaching the age of 58 years.

k)      “RETIREMENT” means termination of services of the employee other than on superannuation.

3.0    SCOPE

These rules shall apply to all the whole time employees of the Company excluding the following:-

(i)             Casual and non-regular employees.

(ii)           Govt. servants and others employed on deputation terms.

(iii)         Employees on contract basis.

(iv)          Apprentices, Trainees and Foreign Technicians.

(v)            Re-employed persons.

Retiring Gratuity computation of amount.

a)       Retiring Gratuity shall be calculated at the rate of half month’s emoluments last drawn by the employee for every completed year of service.

b)       For the purpose of computation of gratuity in continuance of service, the requirement of 240 days shall be for the first year of service only and not for the subsequent year.

c)        During the last year of service before retirement on attaining the age of superannuation, the gratuity shall be computed for full year, if service in the last year of service is 6 months or more.

4.0    PAYMENT OF GRATUITY:

4.1     Gratuity shall be granted to the employees of the Company for good, efficient and faithful service and shall be admissible on termination of employment after he/she has rendered qualifying service for not less than five years.

a)         Superannuation.

b)         Discharge on abolition of post.

c)          Retirement or resignation after five years’ qualifying service in the Company.

d)         Death or permanent incapacity due to bodily or mental infirmity as to which the opinion of the authorised medical officer nominated by the Company shall be final and binding.  In this case the condition regarding completion of qualifying service of five years shall not be necessary.

4.2     An employee, against whom disciplinary action/proceedings are contemplated or pending at the time of resignation/retirement etc., shall not be paid gratuity unless the action/proceedings against the employee have been finalized.  On finalization of the disciplinary proceedings, the release of payment of amount of gratuity will depend on the final outcome of the disciplinary proceedings and keeping in view the orders of the disciplinary authority.  Gratuity will not be admissible to an employee whose services are terminated for misconduct, insolvency or inefficiency.

4.2.1           AMOUNT OF GRAUITY:

(a)       The amount of gratuity shall be equal to 15/26 days’ emoluments for each completed year of service or part thereof in excess of six months subject to a maximum of 20 months’ emoluments or Rs.3,50,000/- whichever is less.

(b)       In the case of death, the amount of gratuity will be as calculated under (a) above or as worked out below, whichever be more:

(c)       In case of re-employed military personnel, Government employees and employees of other Public Sector Undertakings gratuity payable by the Company plus gratuity already received by the employee from the previous employer, if any, shall not exceed Rs.1,00,000/-.

(d)       The Company shall always have the right to deduct from the Gratuity payable and admissible under these rules to an employee, such amount as may be due from the employee.

4.2.2           Employees transferred from undertakings of the Government of India may carry forward their service for the purpose of Gratuity in the Company provided the amount of gratuity earned by him in the former undertaking is transferred by that undertaking to the Company in one lumpsum.  The condition of minimum qualifying service of five years for eligibility for payment of Gratuity would not be invoked when such transfer takes place with the consent of both the employers.

4.2.3           Similarly, transfer of Gratuity earnings may be allowed at the request of the employee when transferred to another undertaking by making lumpsum payment equivalent to the Gratuity earned by the employee to the transferred undertaking.

4.3     Any amount payable to an employee under the Group Gratuity Assurance Scheme of LIC or any such scheme entered into between the Company and LIC /any other insurance company will be set off against the amounts payable under these rules.

5.0    NOMINATION FOR PAYMENT OF GRATUITY:

Employees shall make nomination in the prescribed form as mentioned in Annexure-I to these rules, conferring in one or more persons of his/her family the right to receive the Gratuity in the event of his/her death while in service or after quitting service but before payment of the Gratuity is made, indicating the share payable to each member.  In the case of an employee having no family, the nomination may be made in favour of person or persons or body of persons, corporate or incorporate.  In the event of there being no nomination, the Gratuity on death shall be paid in the manner indicated below:

a)       If there are one or more surviving members of the family as in (i) to (iii) in Rule 2.0(g) above, it shall be paid to all such members other than a widowed daughter in equal shares.

b)       If there are no such surviving members of the family, but there are one or more surviving widowed daughters and/or more surviving members of the family as mentioned in (iv) to (viii) in Rule 2.0 (g) above the Gratuity shall be paid to such members, in equal shares.

6.0    APPLICATION FOR GRATUITY:

Application for the grant of Gratuity shall be submitted in the prescribed form as mentioned in Annexure – II.

7.0    INTERPRETATION:

In the event of any dispute as to the interpretation of these rules, the decision of the Chairman-cum-Managing Director thereon shall be final and binding.

ANNEXURE – I

The Controlling Officer,

__________________

__________________

Dear Sirs,

            I, Shri/Smt/Kumari__________________________________________ (name in full in block letters), son/wife/daughter of Shri _________________________________ hereby appoint the person(s) mentioned below to receive the gratuity payable after my death as also the gratuity standing to my credit in the event of my death before the amount has become payable or having become payable has not been paid and direct that the said amount of gratuity shall be paid in proportion indicated against the name(s) of the nominees.  This is in super session of any previous nomination made by me n this regard.

Certified that the above entries were made by me/read out to me.

Appointment of Nominee signed/thumb impressed before me.

FOR USE IN OFFICE

            Certified that the particulars of the above appointment of Nominee(s) have been verified and recorded in this establishment.

Signature of the Officer Authorised

Designation:

Office Stamp

ANNEXURE – II

(Rule No. 5)

APPLICATION FOR GRATUITY

SIGNATURE OF THE EMPLOYEE

Witness:

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