Section 14 of Payment of Gratuity Act 1972 - Act to Override Other Enactments

Section 14 of the Payment of Gratuity Act, 1972 was an overriding provision. It gave the Act and rules made under it precedence over inconsistent provisions contained in another enactment, or in an instrument or contract having effect by virtue of another enactment.

Current legal position: The Code on Social Security, 2020 has been enforced from 21 November 2025. The current general overriding provision is Section 161 of the Code. It gives the Code overriding effect over inconsistent provisions of other laws and over inconsistent terms of awards, agreements or contracts of service, while expressly preserving more favourable benefits available to a person.

Text of Section 14 - Act to Override Other Enactments

14. Act to override other enactments, etc. The provisions of this Act or any rule made thereunder shall have effect notwithstanding anything inconsistent therewith contained in any enactment other than this Act or in any instrument or contract having effect by virtue of any enactment other than this Act.

Meaning of Section 14

Section 14 contained a non-obstante clause. A non-obstante clause is a legislative device generally used to give the provision containing it overriding operation where there is an inconsistency with another provision or legal instrument within the scope defined by the legislature.

The words "notwithstanding anything inconsistent therewith" were therefore central to Section 14. The overriding effect operated where another enactment, instrument or contract was inconsistent with the Payment of Gratuity Act or a rule made under it. The provision did not require every other law or contract to be ignored; its operation was directed at inconsistency.

What Was Overridden by Section 14?

  • An inconsistent provision contained in an enactment other than the Payment of Gratuity Act could yield to the Act.
  • An inconsistent instrument having effect by virtue of another enactment could also be overridden.
  • An inconsistent contract having effect by virtue of another enactment fell within the wording of Section 14.
  • The overriding effect extended to rules made under the Payment of Gratuity Act.
  • The extent of the override depended on the existence and scope of the inconsistency.

Section 14 and Better Terms of Gratuity

Section 14 should be read with the former Section 4 - Payment of gratuity. Section 4(5) provided that nothing in Section 4 affected an employee's right to receive better terms of gratuity under any award, agreement or contract with the employer. Accordingly, the former Act itself recognised more favourable contractual or award-based gratuity terms.

Current Law - Section 161 of the Code on Social Security 2020

Section 161 of the Code on Social Security, 2020 now contains a broader express rule dealing with the Code's effect in relation to inconsistent laws and employment arrangements.

Section 161(1): The Code has effect notwithstanding anything inconsistent with it contained in any other law for the time being in force, or in the terms of an award, agreement or contract of service, whether made before or after the Code came into force.

The proviso preserves benefits that are more favourable to the person under an award, agreement, contract of service or otherwise. A person continues to be entitled to those more favourable benefits for the matter concerned.

Section 161(2): The Code does not prevent a person from entering into an agreement with the employer for rights or privileges that are more favourable than those available under the Code.

How Section 161 Differs from Former Section 14

The former Section 14 focused on inconsistency between the Payment of Gratuity Act or its rules and another enactment, instrument or contract having effect by virtue of another enactment. Section 161 of the Code on Social Security expressly addresses other laws as well as awards, agreements and contracts of service, and expressly safeguards more favourable benefits and agreements.

For gratuity, this approach is also consistent with Section 53(5) of the Code, which provides that nothing in Section 53 affects an employee's right to receive better terms of gratuity under an award, agreement or contract with the employer.

Practical point: An overriding clause does not by itself answer every conflict question. The provisions must first be compared to identify whether a genuine inconsistency exists and, if so, the extent to which the overriding clause operates. More favourable benefits expressly preserved by the current Code must also be considered.

Repeal and Savings

Section 164 of the Code on Social Security deals with repeal and savings. The former Payment of Gratuity Act, 1972 was one of the enactments repealed as part of the consolidated social security framework. Earlier actions, rights, liabilities and proceedings may therefore require consideration of Section 164 and the applicable transitional provisions.

Related Provisions

See also Section 4 - Payment of gratuity, Section 5 - Power to exempt, Section 13 - Protection of gratuity, Section 13A - Validation of payment of gratuity and Section 15 - Power to make rules.

Official Legal Resources

For authoritative current material, refer to the Ministry of Labour and Employment - Code on Social Security, 2020, the official Code text, and the Ministry's Labour Codes rules and notifications page.

This article provides general statutory information. The effect of an overriding clause in a particular dispute depends on the provisions being compared, the nature of the inconsistency, applicable savings and the facts of the case.