Payment of Gratuity Act and Maternity Benefits Ordinance
The Payment of Gratuity Act rewards long service when employment ends; the Maternity Benefits Ordinance gives women workers paid maternity leave and job protection.
Payment of Gratuity Act
Gratuity is a lump sum paid to a worker when his employment ends, as a reward for long and continuous service. The Payment of Gratuity Act of 1983 makes it compulsory for an employer who employs at least the number of workmen the Act sets to pay gratuity to a workman who has completed the minimum period of service the Act sets. It is payable on termination by any means: resignation, retirement, death, or termination by the employer. The amount is worked out from the last wage and the years of completed service, using the formula in the Act.
Main features of the Payment of Gratuity Act
- Compulsory for every covered employer.
- Payable however the employment ends, including resignation and death (paid to heirs).
- Based on the last wage and the number of completed years of service.
- Must be paid within the time the Act sets after termination.
- If unpaid, the Commissioner General of Labour can recover it from the employer.
- Workers of smaller employers may still receive gratuity under a collective agreement, an award or a Labour Tribunal order.
Maternity Benefits Ordinance
The Maternity Benefits Ordinance of 1939 protects women workers, for example in factories and on estates, during pregnancy and after childbirth. Its purpose is to protect the health of mother and child and to stop women losing their jobs because of pregnancy. Women employed in shops and offices get similar protection under the Shop and Office Employees Act, and public servants under the Establishments Code.
Main features of the Maternity Benefits Ordinance
- Paid maternity leave for a period around childbirth, as set by the Ordinance.
- Maternity benefit (pay) during that leave, paid by the employer.
- The employer may not employ the woman for a set period after her confinement.
- Nursing intervals during the working day to feed the baby, until the child reaches a set age.
- No dismissal, or notice of dismissal, because of pregnancy or confinement.
- The woman gives her employer notice of her expected confinement; penalties apply to employers who break the rules.
Why employers plan for these laws
Large Sri Lankan companies show their future gratuity liability in the financial statements under LKAS 19, using actuarial valuations. A garment factory worker who becomes pregnant is entitled to paid maternity leave and nursing intervals, and cannot be dismissed because of her pregnancy.
Short answer: “What is gratuity?” A lump sum paid to a workman on termination of employment, by any means, as a reward for long continuous service, compulsory for covered employers under the Payment of Gratuity Act.
Structured question: “Explain the main features of the Maternity Benefits Ordinance.” Purpose; paid maternity leave and benefit; no employment for a period after confinement; nursing intervals; no dismissal for pregnancy; notice by the worker; penalties.
Essay: “Explain the purpose and main features of the Payment of Gratuity Act and the Maternity Benefits Ordinance.” For each: purpose, coverage, main features, enforcement; then why employers plan for them (LKAS 19, leave cover); close.
Gratuity = reward for years, paid however the job ends. Maternity = L-B-N-D: Leave, Benefit (pay), Nursing intervals, no Dismissal.