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Cabinet approves introduction of the Payment of Gratuity (Amendment) Bill, 2017 in the Parliament

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Cabinet approves introduction of the Payment of Gratuity (Amendment) Bill, 2017 in the Parliament

The Union Cabinet chaired by the Prime Minister Shri Narendra Modi has given its approval for introduction of the Payment of Gratuity (Amendment) Bill, 2017 in the Parliament.

The Amendment will increase the maximum limit of gratuity of employees, in the private sector and in Public Sector Undertakings/ Autonomous Organizations under Government who are not covered under CCS (Pension) Rules, at par with Central Government employees.

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 workmen after retirement, whether retirement is a result of the rules 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 now is Rs. 20 Lakhs effective from 1.1.2016.

Therefore, considering the inflation and wage increase even in case of employees engaged in private sector, the Government is of the view that the entitlement of gratuity should be revised for 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.

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Comments

  1. Simultaneously govt should amend the payment of gratuity act for calculating gratuity @ of one month for every year service rendered by the government employees so that the retiring community may avail benefits of enhanced gratuity

  2. The revision of gratuity amount from 10 to 20 lacs is effective from the date on which bill has been passed by the parliament or with effect from 01/01/2016?. i.e.,those who were retired after January 2016 would get the difference in case of public sector employees?

  3. THE UOI, THE GOVT MADE A CEILING OF GRATUITY PAYMENT ONLY UPTO MAXIMUM OF 33 YEARS EXTRA SERVICE IS NOT TAKEN INTO ACCOUNT AS LAID DOWN IN THE PG ACT 1972.. THIS IS AGAINST THE PROVISIONS OF THE LAW THE JUDICIAL PRECEDENTS, ONLY CG RAILWAY EMPLOYEES RIGHTS EQUALITY BEFORE LAW IS DEPRIVED… KINDLY TO REMOVE THIS CEILING
    FROM CCS, RAILWAY PENSION RULES AND BRING ALL INTO CONTROL OF PGACT PROVISIONS
    SESHADRIVIKRALA ASC RETIRED PRESIDENT RPF PENSIONER’S WELFARE ASSOCIATION SOUTH CENTRAL RAILWAY SECUNDERABAD