Payment of Gratuity (Amendment) Bill, 2018 passed by Parliament
Ministry of Labour & Employment
Payment of Gratuity (Amendment) Bill, 2018 passed by Parliament
22 MAR 2018
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 15th 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