Labour Law & Hr Consultant
Partner - Risk Management
Your interpretation is correct. Others may be under the wrong impression that since a charitable organization registered under the State Societies Registration Acts or u/s 8 or 25 of the Companies Act,2013 is a non-profit organization and is exempt from certain provisions of certain Laws like the Companies Act,2013, Income Tax Act etc., is also exempted from the Labor Laws of the country. If you read the interpretation of the term "industry " in the Supreme Court's historic judgment in Bangalore Water Supply & Sewerage Board v. A.Rajappa case which still holds good, what is important is the systematic co-operation between the employer and employees in the running of the organization for the purpose of satisfaction of human needs or wants. Even in case Spirituality is the main purpose, if certain activities of the organization are separable as analogous to industry, the "dominant nature test " has to be applied. Already societies registered under the Societies Registration Act are brought within the purview of the Payment of Gratuity Act,1972 by means of notification u/s 1(3)(c) of the Act.
The arguments said to be advanced are quite untenable. The financial commitments towards the lawful running of the organization can not be deleted from the budget to compute the surplusage of the funds of the organization. It is the effectiveness of the efforts of the trustees or directors of the organization to mobilise funds by other means if any donor is circumspect about the ways of the use of money donated by him.
5th January 2018 From India, Salem
The doner probably does not care about statutory dues as it hardly affects or impacts him. But your organisation, directors and trustees as well as managers will be liable for prosecution. Is that a risk you want to take ?
The excuse that doner refused to give us definitively not acceptable to the courts
24th January 2018 From India, Mumbai
There is an employer-employee relationship in the organisation.
Maintaining books on mercantile basis or cash basis or accrual basis is company decision and it cannot affect entitlement of Garatuity.
24th January 2018 From India, Pune