Gratuity Limit Increase to Rs. 10 Lakh: What Does the Delay in Implementation Mean for You?

Dear Friends,

The Payment of Gratuity Act 2010 has been enacted, wherein the Gratuity limit has been increased to Rs. 10 Lakh from 3.5 Lakh. However, the date of implementation is yet to be notified.

Regards,
Anil Kaushik
Chief Editor, Business Manager
B-138, Ambedkar Nagar, Alwar-301001 (Raj), India
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Hi,

Please be informed that the limit for the increase in gratuity has not been amended yet. It has only been noted in parliament, but no official action has been taken regarding it.

Regards, Kapil Kotwal Manager-HR

Dear Kapil,

Your input is confusing. What is official or unofficial? It is not a grapevine. After having passed in both the houses of parliament, the bill is sent to the president of the country. The bill converts into an Act only when the president gives consent. The Payment of Gratuity Act has been approved by the president after the parliament passed the bill. That's why it is called the Payment of Gratuity Amendment Act of 2010. Now what is left is the date of implementation, which at any time the government can notify. For this date, the government need not go to parliament and the president again.

Hope the things are clear to you now.

Regards,
Anil Kaushik

I have been working in Kinshasa, D.R. Congo (and I'm local) for a company based in Dubai since January 2009 onwards. I had a three-month contract renewed three times, totaling 9 months of contracts. However, my contract has not been renewed since then on the grounds that the company in DRC was just settling. In the meantime, I am still working for that company and receiving a regular salary. Instead of a renewed contract, I receive a copy of my payslip (which I had to fight to obtain). It is the only proof I have to show that my working contract has extended beyond the initial 9 months.

Luckily, my country recognizes common law, even though everything is signed under the company based in Dubai. I am wondering if I will be eligible for gratuity as a local working for a UAE-based country. I am concerned about getting stuck in this situation. What would you advise me?

Government has now notified that the effective date is from 24th May 2010. However, it remains a moot point as to who decides the effective date and what the criteria are; everything seems hazy. Parliament nods okay. But why is the same parliament silent about the date of implementation, and why does such a powerful parliament shrug its responsibility of the date of implementation? A man or woman retiring on the 24th gets Rs. Ten lakhs, and a man or woman retiring a day (or a month) earlier receives six and a half lakhs less. He or she would be in tears. This is pathetic.

T.K. Chandrasekaran, SBI, Chennai 7024.