Understanding the 2012 Gratuity Amendment: What Changes Should Employees Expect?

A bill for further amendment of the Payment of Gratuity Act 1972 was introduced in the Rajya Sabha on 23.11.2012.

Regards,
Sant Tomar
Assistant Manager IR & Legal
Lafareg A&C India Pvt. Ltd.

The chances of passing this bill are nearly zero. This bill was introduced by one of the members of Parliament and not by the Government. Such a bill, introduced not by the Government, is called a 'Private Bill'.

This issue was discussed earlier, during which one of the members, Shri. P. C. Agrawal, provided the above input.

As Korgaonkar has put it, this is a private bill put up by Shri Ram Chandra Kuntia, Vice President of INTUC. Since there is no official support from the Government, the bill is not likely to make any headway. Such a quantum jump in gratuity cannot be appreciated, considering the general recessionary trend in the industry these days.

Regards,
KK

The above comments are very true, but if we see, the maximum amount of gratuity is limited to Rs 10 Lakhs. This means any employer can give a maximum of 10 lakhs of rupees, based on the employee's Basic Salary (BAS) + Dearness Allowance (DA). One can also see that if this bill gets approved, the sustainability of employees will likely increase, encouraging them to stay longer with the company.

No doubt it is a "Private Bill," but all trade unions and the entire working class must unite and put pressure on all political parties to support the right cause.

Thanks for updating me on the proposed amendment to the Payment of Gratuity Act, 1972. One of our members has rightly pointed out that such a bill moved by a member of either house is called a "private bill." Such bills are hardly likely to see the light of day as they do not have general acceptance from either the members of either house or from the Party.

It is further observed that the proposal to increase the number of days from 15 days to 30 days for the purpose of calculating the quantum of gratuity is too harsh. Neither of the employers' organizations will support it, particularly when there has been an increase in the maximum limit of gratuity from 3.5 lakhs to ten lakhs in the recent past.

Regards,
BS Kalsi
New Member

Any such move must first be passed by both houses of parliament, i.e., the honorable members of parliament (Rajya Sabha & Lok Sabha). It should be presented and voted on by a two-thirds majority. Then, the passed bill should be sent to the President for his signature. Subsequently, it would be published through an official notification in the Gazette.

Thanks,

Regards

It would have been better if the ceiling of Rs 10 lakhs is removed and the rate is increased to 20 days.

Regards,
Varghese Mathew

Thank you for sharing and updating on the proposed amendment in the Payment of Gratuity Act, 1972. If you have any information about "The Payment of Bonus (Amendment) Bill, 2010 (Bill No.15 of 2010)," please share.

Regards.

Dear Sir,

I have worked with a public limited company for 4 years and 9 months. Am I eligible for gratuity? My date of joining was 28/06/2010, and I resigned on 07/04/2015. Kindly let me know whether I am eligible to receive gratuity or not.

Regards,
Prasanta