Section 6 of Payment of Gratuity Act 1972 - Nomination
Section 6 of the Payment of Gratuity Act, 1972 governed nomination by an employee for gratuity payable after the employee's death. It dealt with when nomination had to be made, who could be nominated, changes after acquiring a family, modification of a nomination and the employer's custody of nomination records.
Meaning of nomination for gratuity
A nomination identifies the person or persons entitled to receive the employee's gratuity in the circumstances covered by the gratuity law. Under the former Section 6, an employee who had completed one year of service was required to make a nomination in the prescribed form and manner. Where the employee had a family, the nomination had to be in favour of one or more family members.
Text of former Section 6 - Nomination
6. Nomination.
(1) Each employee, who has completed one year of service, shall make, within such time, in such form and in such manner, as may be prescribed, nomination for the purpose of the second proviso to sub-section (1) of section 4.
(2) An employee may, in his nomination, distribute the amount of gratuity payable to him under this Act amongst more than one nominee.
(3) If an employee has a family at the time of making a nomination, the nomination shall be made in favour of one or more members of his family, and any nomination made by such employee in favour of a person who is not a member of his family, shall be void.
(4) If at the time of making a nomination the employee has no family, the nomination may be made in favour of any person or persons but if the employee subsequently acquires a family, such nomination shall forthwith become invalid and the employee shall make, within such time as may be prescribed, a fresh nomination in favour of one or more members of his family.
(5) A nomination may, subject to the provisions of sub-sections (3) and (4), be modified by an employee at any time, after giving to his employer a written notice in such form and in such manner as may be prescribed, of his intention to do so.
(6) If a nominee predeceases the employee, the interest of the nominee shall revert to the employee who shall make a fresh nomination, in the prescribed form, in respect of such interest.
(7) Every nomination, fresh nomination or alteration of nomination, as the case may be, shall be sent by the employee to his employer, who shall keep the same in his safe custody.
Key rules under former Section 6
- One year of service: the nomination obligation arose after completion of one year of service.
- More than one nominee: gratuity could be distributed among multiple nominees.
- Employee with a family: nomination had to be made in favour of one or more family members; a nomination in favour of a non-family person was void.
- Employee without a family: any person could initially be nominated, but that nomination became invalid when the employee subsequently acquired a family.
- Modification: the employee could modify a valid nomination by giving the prescribed written notice to the employer.
- Death of nominee: if a nominee predeceased the employee, the nominee's interest reverted to the employee and a fresh nomination was required for that interest.
- Employer custody: the employer was required to keep nominations, fresh nominations and alterations in safe custody.
Current law - Section 55 of Code on Social Security 2020
Section 55 of the Code on Social Security, 2020 substantially carries forward the gratuity nomination framework. An employee who has completed one year of service must make a nomination within the time, form and manner prescribed by the appropriate Government. The employee may distribute gratuity among more than one nominee.
If the employee has a family when making the nomination, the nomination must be in favour of one or more family members and a nomination in favour of a person outside the family is void. If the employee has no family, nomination may initially be made in favour of any person or persons; on subsequently acquiring a family, that nomination becomes invalid and a fresh nomination must be made in favour of one or more family members.
The current provision also permits modification of a nomination through written intimation to the employer, requires a fresh nomination where a nominee predeceases the employee, and requires every nomination, fresh nomination or alteration to be sent to the employer for safe custody.
Definition of family for gratuity nomination
For nomination purposes, the applicable statutory definition of family is important because a nomination outside the family is invalid where the employee has a family. The Code on Social Security, 2020 contains the relevant definitions and gratuity provisions in Chapter V. The precise persons included can depend on the statutory definition and the employee's circumstances, so the current Code and applicable rules should be checked when preparing or changing a nomination.
Nomination forms and applicable rules
Section 55 leaves the time, form and manner of nomination to rules prescribed by the appropriate Government. The Ministry of Labour and Employment published the draft Social Security Code (Central) Rules, 2025 on 30 December 2025. For an actual nomination, the rules and forms currently applicable to the particular establishment and appropriate Government should be verified before filing.