Gratuity Rules explained: this guide covers what it means, who it applies to, the step-by-step process, documents required, fees, due dates and penalties in India — so you can stay compliant with confidence and avoid costly mistakes.
Rules 19 to 36 of the Code on Social Security (Ladakh) Rules, 2026 give an employer in Ladakh the forms and clocks for gratuity (nomination, application, notice, payment, appeal), the complaint route for maternity benefit, the funeral deposit and notice book under employee's compensation, and the procedure and fee before the Employees Insurance Court.
After a gratuity application the employer has fifteen days to issue a Form VIII notice, with payment fixed for a date not later than the thirtieth day after receipt. A nomination is made in Form IV, ordinarily within thirty days of completing one year of service. If an employee dies from an injury, the employer deposits a funeral sum of fifteen thousand rupees "or such amount as may be notified by the Administration through Gazette notification" with the competent authority.
The rule set
This article explains the Code on Social Security (Ladakh) Rules, 2026, as notified by S.O.224 dated 20 July 2026 (Gazette Extraordinary of 10 August 2026). Later amendments and State notifications under these rules should be checked in the State Gazette. Rule 1(3) reads: "They shall come into force after the date of their final publication in the Official Gazette." The first article, on Boards, cess, authorities and vacancy reporting, covers the rest of the rules.
For the Central gratuity position see rules 31 and 32 and rule 33. Payroll teams can run a check of nomination files and gratuity calendars through our payroll compliance audit.
Gratuity (rules 21 to 25)
| Step | Rule | Form | Time limit as printed |
|---|---|---|---|
| Nomination, employee already one year in service on commencement | 22(1)(a) | IV, in duplicate | ordinarily within ninety days of commencement |
| Nomination, on completing one year | 22(1)(b) | IV | ordinarily within thirty days of completing one year |
| Employer verifies and returns attested duplicate | 22(2) | IV | within thirty days of receipt |
| Fresh nomination after acquiring a family | 22(3) | V | within ninety days |
| Modification, including a nominee predeceasing | 22(4) | VI | as in sub-rule (1) |
| Application by employee or authorised person | 23(1)(a) | VII | ordinarily within thirty days from when gratuity became payable |
| Application by nominee | 23(1)(b) | VII | ordinarily within thirty days |
| Application by legal heir | 23(1)(c) | VII | ordinarily within one year |
| Employer's notice, admissible or not | 23(2)(a) | VIII | within fifteen days of receipt; payment date not later than the thirtieth day after receipt |
| Application to competent authority for direction | 23(4) | IX | within one hundred eighty days of the cause |
| Competent authority's disposal | 23(5) | X notice | not to exceed ninety days from filing |
| Direction for payment | 23(11) | XI | pay within thirty days of receipt of notice |
| Modified amount after appeal | 23(12)(h) | XI | within fifteen days |
| Appellate authority's disposal | 23(12)(i) | - | not to exceed ninety days |
| Recovery application | 23(13) | XII | after non-payment |
Points an employer should hold on to:
- A nomination is accepted even after the specified period: "no nomination so accepted shall be invalid merely because it was filed after the specified period" (rule 22(1) proviso). It takes effect from the date the employer receives it (rule 22(6)), and is signed in the presence of two witnesses (thumb impression if illiterate).
- Rule 23(1)(a), second proviso, deals with fixed term employees: gratuity if they render service under the contract for a period of one year, at "fifteen days' wages, based on the rate of wages last drawn by him, for every completed year of service or part thereof in excess of six months".
- If a claim is refused, the Form VIII notice must give the reasons, and a copy is endorsed to the competent authority (rule 23(2)(a)).
- Payment is by demand draft or credit to the bank account, with intimation of the details to the competent authority (rule 23(3)).
- Late applications are entertained on sufficient cause; no claim is invalid merely for lateness (rule 23(1)(e)).
- A minor's share is invested by the competent authority in a term deposit with the State Bank of India or a Nationalized Bank (rule 21).
- Rule 24 requires every employer to register the establishment electronically in Form XIII within thirty days of the notification of compulsory insurance under section 57(1).
- Rule 25 lets the Administration appoint, by notification, an officer not below Assistant Labour Commissioner as Competent Authority and a higher officer as Appellate Authority; the opposite party's comments on an appeal are due within fourteen days of receiving the memorandum (rule 25(7)).
Rule 53 (in the miscellaneous chapter) adds that a copy of Form VIII is shared electronically with the designated authority and the Director General, Labour Bureau. The rules print the gratuity formula only for fixed-term employees; for the rest, the Code governs.
Maternity benefit (rule 26)
A complaint under section 72(1) is made in writing in Form XIV. When the Inspector-cum-Facilitator receives a complaint under section 72(2), he examines the employer's records and employees, and if satisfied that benefit has been improperly withheld, directs payment immediately or within a specified period. The time limit for disposal "shall not exceed ninety days" from filing, with a maximum of three opportunities if a party does not appear. An appeal lies with the competent authority in Form XV, and the decision is to be given within ninety days of filing. The Central post is rules 34 and 35; the creche and nursing breaks are in rules 36 and 37. The Ladakh rules in this range print no creche or nursing-break rule of their own.
Employee's compensation (rules 27 to 36)
| Subject | Rule | As printed |
|---|---|---|
| Funeral expenses on death | 27 | Employer deposits with the competent authority "a sum of fifteen thousand rupees or such amount as may be notified by the Administration through Gazette notification", for the eldest surviving dependent or the person who incurred the expense; the Administration may enhance it |
| Review without medical certificate | 28 | Five grounds, e.g. wages increased or diminished, compensation stopped without change in condition, fraud, or error apparent on the record |
| Notice book | 29 | Every employer to which the Code applies maintains it in Form XVI |
| Medical examination | 30 | Not elsewhere than where the employee resides, not more than twice in the first month after the accident and once in any later month |
| Fatal accident statement | 31 | Form XVII |
| Memorandum of agreement | 32 | Form XVIII, XVIII A or XVIII B, in duplicate; notice in Form XIX; register in Form XX |
| Competent authority | 33-34 | Appointed by notification; jurisdiction and transfer rules |
| Disposal | 35(1) | Within six months of receiving the application |
| Certified copies | 35(2) | Rupees hundred per copy |
| Evidence | 36 | Affidavits after issues are framed; opposite party may cross-examine |
The Central posts are rules 57 to 59 and the compensation forms. The rules print the funeral sum together with the possibility of notification; check the Gazette for any notified amount.
The Employees Insurance Court (rules 19 and 20)
An application under section 49 is presented in triplicate in Form II with the particulars listed in rule 19(1), verified as a pleading in a Civil Court, with documents and an accurate list; the Court keeps a register in Form III. The application is filed within three years of the cause of action (rule 19(2)(i)). The fee on an application under section 49 is "hundred rupees", collected by Court fee stamps (rule 19(3)). The Court follows the Code of Civil Procedure, 1908 on summons and evidence. A second appeal from the Medical Appeal Tribunal to the Court is filed in Form I within ninety days of receiving the Tribunal's order, extendable for sufficient reasons (rule 20). Central reference: rules 29 and 30.
Example. Nubra Valley Tours, an invented firm in Leh, receives a Form VII gratuity application from a retired manager. It issues a Form VIII notice within fifteen days, fixing the payment date no later than the thirtieth day after receipt, pays by credit to his bank account and informs the competent authority of the payment details. It also sends the Form VIII copy to the Labour Bureau route set by rule 53.
Common lapses
- Refusing a late nomination: the rule says a nomination is not invalid merely because it was late.
- Sending a refusal without reasons or without endorsing the competent authority.
- Not filing the funeral deposit with the competent authority after a fatal injury.
- Missing the 100-rupee Court fee stamp on an application before the Employees Insurance Court.
Need help with gratuity and compensation files?
A neat nomination register and a gratuity calendar prevent most disputes. If you want your Ladakh payroll and HR files tested against Forms IV to XII, our payroll compliance audit can help.
Key takeaways
- Form IV nomination within thirty days of one year's service, ordinarily; late nominations are still valid.
- Form VIII notice within fifteen days; payment date not later than day thirty.
- Competent authority and appellate authority each have ninety-day limits.
- Funeral deposit: fifteen thousand rupees or the amount notified.
- Employees Insurance Court application fee: hundred rupees; filing limit: three years.
Read next
- Code on Social Security (Ladakh) Rules, 2026: Boards, cess, authorities and vacancy reporting
- Ladakh OSH Rules, 2026: registration, employer duties, hours and registers
- Forms IV, V and VI: Central gratuity application, notice and dispute forms
Disclaimer: Based on the State or Union territory rules named above, as notified under the Labour Codes and consulted on 4 October 2026. Later amendments, State notifications, fees and forms should be checked in the State Gazette and on the State labour department website. This article is general information, not legal advice; check the official text before acting.