Umakanthan53
Labour Law & Hr Consultant
Korgaonkar K A
Ba,llb,mpm,dir&pm,dll&lw,d.cyber
Pkjain62
Service As Dgm-hr/legal
Harshal16
Junior Manager (hr)
Ninadjoshi
Hr Officer
Hridan
Section Officer
+3 Others

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Dear Seniors,
I want to know whether any employer a. govt. autonomous organization b. Private organization. can withdraw from paying gratuity...I mean can an employer declare that hence forth no gratuity to any employee....
Please answer

From India, Asansol
Dear Harshal,
Payment of Gratuity to eligible employee is binding on company and gratuity is inherent right of an eligible employee. So this right can not be deprieved off by any employer.
Thanks and regards,
Ninad Joshi

From India, Mumbai
Dear Harshal,
As per sec. 5 of the Gratuity Act – the appropriate Govt. may exempt any establishment for operation of the Act …… Provided if the Govt. is of the opinion that the employees of the establishment are in receipt of gratuity payment or pensionary benefits not less favorable than the benefits conferred under the Act.
So if any establishment provides any pensionary benefits to its employees more favorable than the benefits provided in the Act, only it can be done that too with the prior approval of the appropriate Govt. otherwise not.
Not in straightway as mention in your query whether it a govt. autonomous or private organization.

From India, Delhi
Gratuity act is applicable to the establishment coming under section 1(3) of POG. It is not applicable for Government organisations unless notified by Government.
From India, New Delhi
It is wrong to say that POG is not applicable to Govt organisations.It is applicable also to factories,mine plantations,port railways.shop&commercial estt belonging to or under the control of Govt.But it is not applicable to govt servants governed by separate rules.In Kerala POG Act is applicable to co-operative sector also.
Varghese Mathew
09961266966

From India, Thiruvananthapuram
Dear MR. Pkjain,
IF the employees are under New Pension Scheme, which virtually has no pensionary benefits can the org which was established by special act of parliament,withdraw the payment of gratuity?
And mr. Varghese, is there any written evidence of ur info that it is not applicable to govt servants governed by separate rules.
And what about Pvt sector organisations can they do it...

From India, Asansol
Mr Harshal
Pl see sec.1(3)of POG Act1972 showing the applicability of the Act which is not covering Govt depts/ servant other than those mentioned in cl (a),(b)&(c)of sec1(3).Govt servants governed by state/central service rules have separate provisions therein for gratuity.If the organisation is one mentioned in sec 1,then it\'s private or public nature make no difference.For more pl contact me.
Varghese Mathew
09961266966

From India, Thiruvananthapuram
Hi Harshal1,
Once a private sector organisation comes under payment of gratuity Act, it can never withdraw. It is binding for lifetime of the company. You can visit this link for a quick but informative brief on POG.
Labour laws for companies in india
Have a nice diwali.

From India, Bangalore
Dear All,

I am reproducing the section 1(3) and (3-A) as under:

1 (3): It (Act) shall apply to-

Every factory, mine, oilfield, plantation, port and railway company;

Every shop or establishment within the meaning of any law for the time being in force in relation to shops and establishments in a State, in which ten or more persons are employed, or were employed, on any day of the preceding twelve months;

Such other establishments or class of establishments, in which ten or more employees are employed, or were employed, on any day of the preceding twelve months, as the Central Government may, by notification, specify in this behalf.

1 (3-A): A shop or establishment to which this Act has become applicable shall continue to be governed by this Act, notwithstanding that the number of persons employed therein at any time after it has become so applicable falls below ten.

Now can any body tell all the members where it is mentioned about private sector or publice sector?

According to my understanding the POG Act is applicable irrespective of, whether it is private sector or public sector. And once the Act is applicable, it remains applicable forever.

I am also reproducing the section 5 as under:

5. Power to exempt.-

1[(1) The appropriate Government may, by notification, and subject to such conditions as may be specified in the notification, exempt any establishment, factory, mine, oilfield, plantation, port, railway company or shop to which this Act applies from the operation of the provisions of this Act if, in the opinion of the appropriate Government, the employees in such establishment, factory, mine, oilfield, plantation, port, railway company or shop are in receipt of gratuity or pensionary benefits not less favourable than the benefits conferred under this Act.

2[(2) The appropriate Government may, by notification and subject to such conditions as may be specified in the notification, exempt any employee or class of employees employed in any establishment, factory, mine, oilfield, plantation, port, railway company or shop to which this Act applies from the operation of the provisions of this Act, if, in the opinion of the appropriate Government, such employee or class of employees are in receipt of gratuity or pensionary benefits not less favourable than the benefits conferred under this Act.]

3[(3) A notification issued under sub-section (1) or sub-section (2) may be issued retrospectively a date not earlier than the date of commencement of this Act, but no such notification shall be issued so as to prejudicially affect the interest of any person].

According to me this section has no meaning. You are exempted from operaton of the provisions of the Act and not exempted from making payment of Gratuity.

I hope Dear Harshal got the answer.

Thanks and regards.

Keshav Korgaonkar

Shantadurgaent.com,Insurance Advisors,Corporate Advisors,Legal Advise,Wage and salary,Shantadurgaent.com,Labour Compliance Audit,SSI registration,NOC from

From India, Mumbai
Dear all,
as mentioned above govt organizations governed by special service rules do not come within the ambit of payment of gratuity act.But does that means they can arbitrarily withdraw from payment of gratuity (given the fact that it is under New Pension Scheme, which is not operational in its full form only tier-i is active, so pensionary benefits are uncertain)
Also i would like to mention Banks do not fall under this act, they follow Desai Award for terminal benefits, so can they also any day opt out of payment of gratuity.......

From India, Asansol

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