Gratuity For IT Exemption Upto Twenty Lakhs -CGWN

Gratuity For IT Exemption Upto Twenty Lakhs -CGWN

Brief on Payment of Gratuity (Amendment) Act, 2018

Brief on Payment of Gratuity (Amendment) Act, 2018

” Representatives are requesting to this Ministry that the effective date of Payment of Gratuity (Amendment) Act, 2018 will 01.01.2016 instead of 29.03.2018 at par with the Central Government employees’

1. The Payment of Gratuity (Amendment) Bill, 2018 has been passed the 14th Sabba Sabha on 15.03.2018 and 22.03.2018 respectively and assented to by the Hon’ble President on 28th March, 2018.

2. The Government vide notification No.1420(E) dated 29th March, 2018 has enhanced the gratuity ceiling under the Payment of Gratuity Act, 1972 from Rs.10 lakh to Rs.20 Lakh with effect from 29th March, 2018.

3. A Large number of representations have been received in this Ministry from the Unions/Organizations/Individuals physically, through Social Media (Facehook/Twitter etc.) and PG Portal whereby the representatives are requesting to this Ministry that the effective date of Payment of Gratuity (Amendment) Act, 2018 will 01.01.2016 instead of 29.03.2018 at par with the Central Government employees’

4. In this regard, it is infirmed that on earlier occasions also, the enhancement in gratuity ceiling under the Payment of Gratuity Act, 1972 has been implemented with prospceiive date only. Further, implementation of the same with effect will be administratively difficult and employers may not have sufficient liquidity to meet the arrears liabilities.

Payment Of Gratuity Inforced On 29th March, 2018

Gratuity ceiling raised to 20 Lakhs w.e.f. 29.3.2018

Payment of Gratuity (Amendment) Act, 2018 brought in force on 29th March, 2018

Decision:The Payment of Gratuity (Amendment) Bill, 2018 has been passed by Lok Sabha on 15th March, 2018 and by the Rajya Sabha on 22nd March, 2018, has been brought in force on 29th March, 2018.

Background: The Payment of Gratuity Act, 1972 applies to establishments employing 10 or more persons. The main purpose for enacting this Act is to provide social security to workman after retirement, whether retirement is a result of superannuation, or physical disablement or impairment of vital part of the body. Therefore, the Payment of Gratuity Act, 1972 is an important social security legislation to wage earning population in industries, factories and establishments.

2. The present upper ceiling on gratuity amount under the Act is Rs. 10 Lakh. The provisions for Central Government employees under Central Civil Services (Pension) Rules, 1972 with regard to gratuity are also similar. Before implementation of 7th Central Pay Commission, the ceiling under CCS (Pension) Rules, 1972 was Rs. 10 Lakh. However, with implementation of 7th Central Pay Commission, in case of Government servants, the ceiling has been raised to Rs. 20 Lakhs.

3. Therefore, considering the inflation and wage increase even in case of employees engaged in private sector, this Government decided that the entitlement of gratuity should also be revised in respect of employees who are covered under the Payment of Gratuity Act, 1972. Accordingly, the Government initiated the process for amendment to Payment of Gratuity Act, 1972 to increase the maximum limit of gratuity to such amount as may be notified by the Central Government from time to time. Now, the Government has issued the notification specifying the maximum limit to Rs. 20 Lakh.

4. In addition, the Bill also envisages to amend the provisions relating to calculation of continuous service for the purpose of gratuity in case of female employees who are on maternity leave from ‘twelve weeks’ to ‘such period as may be notified by the Central Government from time to time’. This period has also been notified as twenty six weeks.

Major Impact: The Bill as passed by both the Houses of Parliament, andassented to by the Hon’ble President and notified by the Government. This will ensure harmony amongst employees in the private sector and in Public Sector Undertakings/ Autonomous Organizations under Government who are not covered under CCS (Pension) Rules. These employees will be entitled to receive higher amount of gratuity at par with their counterparts in Government sector.

Source: PIB

Gratuity Ceiling Amendment Notifications On Government Gazette

Gazette Notification on Gratuity: Amount, Effective Date and Maternity Leave

“Gratuity Ceiling Amendment Notifications issued by Government of India regarding Upper limit of Gratuity Payment, Date on which come into force and Maximum Period of Maternity Leave…

MINISTRY OF LABOUR AND EMPLOYMENT

NOTIFICATION

New Delhi, the 29th March, 2018

S.O. 1419(E).—In exercise of the powers conferred by sub-section (2) of section 1 of the Payment of Gratuity (Amendment) Act, 2018 (12 of 2018), the Central Government hereby appoints the 29th day of March, 2018 as the date on which the said Act shall come into force.

[No.S-42012/02/2016-SS-II]

MANISH GUPTA, Jt. Secy.

NOTIFICATION

New Delhi, the 29th March, 2018

S.O. 1420 (E).—In exercise of the powers conferred by sub-section (3) of section 4 of the Payment of Gratuity Act, 1972 (39 of 1972), the Central Government hereby specifies that the amount of gratuity payable to an employee under the said Act shall not exceed twenty lakh rupees.

[No.S-42012/02/2016-SS-II]

MANISH GUPTA, Jt. Secy.

NOTIFICATION

New Delhi, the 29th March, 2018

S.O. 1421 (E).—In exercise of the powers conferred by clause (iv) of the Explanation to sub-section (2) of section 2A of the Payment of Gratuity Act, 1972 (39 of 1972), the Central Government hereby specifies for the purposes of the said clause that the total period of maternity leave in the case of a female employee shall not exceed twenty-six weeks.

[No.S-42012/02/2016-SS-II]

MANISH GUPTA, Jt. Secy.

Notification Copy

Ceiling Of Gratuity Raised To 20 Lakhs

Upper Ceiling on Gratuity 20 Lakhs – Gratuity Bill Passed by Parliament

Ministry of Labour & Employment

Payment of Gratuity (Amendment) Bill, 2018 passed by Parliament

The Payment of Gratuity (Amendment) Bill, 2018 has been passed by parliament today.The bill ensures harmony amongst employees in the private sector and Public Sector Undertakings/Autonomous Organizations under Government who are not covered under CCS (Pension) Rules. These employees will be entitled to receive higher amount of gratuity at par with their counterparts in Government sector. The bill was passed by the Rajya Sabha today and the Lok Sabha on 15 March, 2018.

The Payment of Gratuity Act, 1972 applies to establishments employing 10 or more persons. The main purpose for enacting this Act is to provide social security to workman after retirement, whether retirement is a result of superannuation, or physical disablement or impairment of vital part of the body. Therefore, the Payment of Gratuity Act, 1972 is an important social security legislation to wage earning population in industries, factories and establishments.

The present upper ceiling on gratuity amount under the Act is Rs. 10 Lakh. The provisions for Central Government employees under Central Civil Services (Pension) Rules, 1972 with regard to gratuity are also similar. Before implementation of 7th Central Pay Commission, the ceiling under CCS (Pension) Rules, 1972 was Rs. 10 Lakh. However, with implementation of 7th Central Pay Commission, in case of Government servants, the ceiling has been raised to Rs. 20 Lakhs.

Therefore, considering the inflation and wage increase even in case of employees engaged in private sector, this Government decided that the entitlement of gratuity should also be revised in respect of employees who are covered under the Payment of Gratuity Act, 1972. Accordingly, the Government initiated the process for amendment to Payment of Gratuity Act, 1972 to increase the maximum limit of gratuity to such amount as may be notified by the Central Government from time to time.

In addition, the Bill also envisages to amend the provisions relating to calculation of continuous service for the purpose of gratuity in case of female employees who are on maternity leave from ‘twelve weeks’ to such period as may be notified by the Central Government from time to time.

After enactment of the Act, the power to notify the ceiling of the amount of gratuity under the Payment of Gratuity Act, 1972 shall stand delegated to the Central Government so that the limit can be revised from time to time keeping in view the increase in wage and inflation and future pay commissions.

Source: PIB

Non-Payment of Gratuity and Pay Revision Arrears by HEC

Non-payment of gratuity and arrears by HEC

Department of Heavy Industry has been receiving complaints of non-payment of gratuity and pay revision arrears by the Heavy Engineering Corporation (HEC), Ranchi to its retired employees. These complaints are forwarded to the Company for appropriate action and redressal of grievances.

As reported by HEC, twenty such complaints have been received by them through the Department during the last two years.

HEC has informed that the payment of gratuity to employees separated upto 31st March, 2014 has already been done except in a few deficient cases, due to specific technical reasons. Outstanding liabilities on account of gratuity payable to retired employees are Rs.50.28 crore. The same hasn’t been paid due to acute financial crisis faced by the Company. However, in case of daughter’s marriage, medical treatment of self and spouse, children’s higher education and remittance of bank’s outstanding loans, part payment of gratuity to ex-employees is being done, as per availability of funds.  Regarding the payment of arrears on account of wage revision 1992 & 2007, a total of Rs.3.71 crore and Rs.24.70 crore (Approx.) respectively are outstanding.

HEC is a company registered under the Companies Act, with a separate legal identity under the Law. The Company is primarily responsible for managing all its affairs independently including meeting expenses related to its employees. Government of India being promoter of the company, has provided financial assistance to the Company in past from time to time in the form of loan, with a view to mitigate the hardship faced by their retired employees due to non-payment of gratuity timely. In the year 2014-15, a loan of Rs.47.89 crore was provided to the company for settlement of outstanding statutory dues (like gratuity etc.) of its employees.

This information was given by Minister of State in the Ministry of Heavy Industries and Public Enterprises Shri Babul Supriyo in reply to a written question in the Lok Sabha today.

Source: PIB News

Retirement Gratuity Ceiling hiked to Rs.20 lakh for bank employees and officers

Retirement Gratuity Ceiling hiked to Rs.20 lakh for bank employees and officers – AIBEA

Joint Ciruclar on Gratuity Ceiling

CIRCULAR TO ALL UNITS & MEMBERS

March, 2, 2017

Dear Comrades,

Improvements in Gratuity under Gratuity Act

Our units are aware that Gratuity is one of the important retirement benefits for the bank employees and officers. In all Banks ( except SBI ), Gratuity is paid as per formula under BPS/OSR or under the Gratuity Act whichever is higher. (In SBI, Gratuity is payable under the Act only).

While there is no ceiling for Gratuity under BPS/OSR, under the Act, there is a ceiling which is at present Rs. 10 lacs. (from 25-5-2010). When an employee or officer retires from the Bank, his/her Gratuity entitlement would be calculated both under the Act and under BPS/OSR and the higher of the two will be paid.

For example, a senior substaff/Daftary retiring after 40 years’ service would be eligible for ( approx.) Rs. 5 lacs under BPS and Rs. 8 lacs under the Act and hence would be paid Rs. 8 lacs as Gratuity.

A senior Clerk/Special Asst. would be eligible for Rs. 9.50 lacs under the BPS and Rs. 10 lacs under the Act and hence would be paid Rs. 10 lacs.

A senior General Manager of a Bank retiring after 40 years’ service would be eligible for Rs. 17 lacs under the OSR and Rs. 10 lacs under the Act and hence would be paid Rs. 17 lacs.

Due to continued inflationary trend and erosion in value of rupee, AITUC and all other Central Trade Unions have been demanding improvement/removal of ceiling under the Gratuity Act. Due to their effort, the ceiling was increased from Rs. 1 lac to Rs. 2.50 lacs, and then to Rs. 3.50 lacs and to Rs. 10 lacs in May, 2010. They have been demanding for removal of ceiling on Gratuity under the Act.

AITUC and Central Trade Unions have been pursuing this issue for the last more than 4 years through various programmes and struggles.

Thus AIBEA and AIBOA have been part and parcel of all these programmes and strikes on the 12 Points Charter of Demands of the Central Trade unions which includes the demand for improvement in Gratuity Act.

AITUC and Central Trade Unions have been following up these demands with the Government and as a result, recently on 23-2-2017, the Central Government called for a Tripartite meeting on the issue of revising the ceiling on Gratuity. From AITUC, its Secretary, Com D L Sachdev participated and put forth the following suggestions.

i) While there should be no ceiling for Gratuity, as an interim measure, Government’s proposal to increase in ceiling of Rs. 20 lacs can be accepted.

ii) The revised ceiling should be made effective from January, 2016.

iii) Minimum service of 5 years for eligibility for Gratuity to be removed.

iv) Gratuity to be paid at 30 days wage per year instead of 15 days wage as atpresent.

v) All factories/establishments to be covered by the Act irrespective of number of workers.

All these matters have to be finally cleared by the Labour Ministry and then by Finance Ministry and then to be brought to the Parliament for amendment to the Gratuity Act.

Units are aware that improvement in Gratuity Act has been one of the demands of our strike on 28-2-2017. We are in touch with the AITUC and will keep our units informed of any further development in this regard.

With greetings,

Yours comradely,

sd/-	sd/-
S. NAGARAJAN	C.H. VENKATACHALAM
GENERAL SECRETARY	GENERAL SECRETARY
AIBOA	AIBEA

Source: AIBEA