The important rules relating to nomination by an employee under the Payment of Gratuity Act, 1972 are listed below:
Rules
1. Nomination to be made with a Fixed Time [Sec. 6(1), and Rule 6(1)]:
Each employee who has completed one year of service is authorised to make a nomination within 30 days from the date of completion of one year service.
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2. Distribution of Gratuity [Sec. 6 (2)]:
An employee may nominate one or more persons to be as nominees. The employee in his nomination shall distribute the amount of gratuity payable to him under the Act, amongst more than one nominee.
3. Nomination in Favor of Family (Sec. 6 (3)] :
If an employee has a family at the time of making a nomination, the nomination shall be made only in favor of one or more members of the family and the nomination already made in favor of any other person (who is not a member of the family) shall be void.
But, if at the time of making nomination, the employee has no family, the nomination may be made in favor of any person or persons. If the employee subsequently, acquires a family, the nomination already made shall become invalid and the employee shall make, within ninety days from the date of acquiring a family, a fresh nomination in favour of one or more members of his family [Sec. 6(4) and Rule 6 (3)].
4. Modification of Nomination:
An employee can modify a nomination made by him earlier, at any time by giving a written notice to his employer, of his intention to do so [Sec. 6(5)]
5. Death of Nominee:
In case of death of the nominee before the death of the employee, the interest of the nominee shall revert to the employee. The employee, in such cases, shall make a fresh nomination in respect of such interest. [Sec. 6(6)]
6. Safe-custody of Nomination [Sec. 6(7)]:
Every nomination, fresh nomination or alteration of nomination, as the case may be, shall be sent by the employee to the employer who shall keep the same in his safe custody. The nomination shall be effective from the date of receipt of the same by the employer.