Gratuity Confusion: Does the New Rule Really Limit Benefits to Post-2010 Service?

Gratuity Calculation Issue

One of our relatives was working in a private school from 01-JUNE-1995 until her retirement on 31-MAY-2016. According to our calculation, she is eligible to receive Gratuity for 21 years (from 1995 to 2016). However, the management claims that a new government regulation regarding Gratuity has been introduced, stating that only the services after 2010 will be considered for the calculation of Gratuity. As per their interpretation, she will receive Gratuity for only 6 years.

Can anyone clarify what the Act actually states?

Understanding the Payment of Gratuity Act, 1972

I have not heard of any new instructions or notifications under the Payment of Gratuity Act, 1972. Therefore, the management's contention may be based on a misinterpretation of the notification dated 03-04-1997 by the Central Government in its S.O.1080, issued under section 1(3)(c) of the Act. This notification brought educational institutions employing 10 or more employees under the Act's purview from the date of notification. It pertains only to gratuity claims from the notification date and not to the service rendered by employees eligible for gratuity before that date. In other words, employees who retired before that date cannot claim gratuity since the Act applies to such educational institutions only from the notification date.

Gratuity for Teachers and the PG (Amendment) Act, 2009

The same situation applies to the payment of gratuity to teachers following the amendment to the term "employee" under section 2(e) and the insertion of a new section 13-A as per the PG (Amendment) Act, 2009.

Therefore, she is eligible to claim gratuity from her appointment date in 1995 to her retirement date in 2016. If the management pays gratuity only according to their calculation, she should receive it and file a claim for the balance before the Controlling Authority.