Press Information Bureau
Government of India
Ministry of Labour & Employment
12 September 2017, 16:54 IST
Cabinet Approves Introduction of the Payment of Gratuity (Amendment) Bill, 2017
The Union Cabinet, chaired by the Prime Minister Shri Narendra Modi, has given its approval for the introduction of the Payment of Gratuity (Amendment) Bill, 2017 in the Parliament. The amendment will increase the maximum limit of gratuity for employees in the private sector and in Public Sector Undertakings/Autonomous Organizations under the Government who are not covered under CCS (Pension) Rules, at par with Central Government employees.
Background
The Payment of Gratuity Act, 1972 applies to establishments employing 10 or more persons. The main purpose of enacting this Act is to provide social security to workmen after retirement, whether retirement is a result of the rules of superannuation, or physical disablement, or impairment of a vital part of the body. Therefore, the Payment of Gratuity Act, 1972 is an important social security legislation for the wage-earning population in industries, factories, and establishments.
The present upper ceiling on the gratuity amount under the Act is Rs. 10 Lakh. The provisions for Central Government employees under Central Civil Services (Pension) Rules, 1972, with regard to gratuity are also similar. Before the implementation of the 7th Central Pay Commission, the ceiling under CCS (Pension) Rules, 1972 was Rs. 10 Lakh. However, with the implementation of the 7th Central Pay Commission, in the case of Government servants, the ceiling now is Rs. 20 Lakhs effective from 1 January 2016.
Therefore, considering the inflation and wage increase even in the case of employees engaged in the private sector, the Government is of the view that the entitlement of gratuity should be revised for employees who are covered under the Payment of Gratuity Act, 1972. Accordingly, the Government initiated the process for the amendment to the Payment of Gratuity Act, 1972.
AKT/VBA/SH
From India, Madras
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21Government of India
Ministry of Labour & Employment
12 September 2017, 16:54 IST
Cabinet Approves Introduction of the Payment of Gratuity (Amendment) Bill, 2017
The Union Cabinet, chaired by the Prime Minister Shri Narendra Modi, has given its approval for the introduction of the Payment of Gratuity (Amendment) Bill, 2017 in the Parliament. The amendment will increase the maximum limit of gratuity for employees in the private sector and in Public Sector Undertakings/Autonomous Organizations under the Government who are not covered under CCS (Pension) Rules, at par with Central Government employees.
Background
The Payment of Gratuity Act, 1972 applies to establishments employing 10 or more persons. The main purpose of enacting this Act is to provide social security to workmen after retirement, whether retirement is a result of the rules of superannuation, or physical disablement, or impairment of a vital part of the body. Therefore, the Payment of Gratuity Act, 1972 is an important social security legislation for the wage-earning population in industries, factories, and establishments.
The present upper ceiling on the gratuity amount under the Act is Rs. 10 Lakh. The provisions for Central Government employees under Central Civil Services (Pension) Rules, 1972, with regard to gratuity are also similar. Before the implementation of the 7th Central Pay Commission, the ceiling under CCS (Pension) Rules, 1972 was Rs. 10 Lakh. However, with the implementation of the 7th Central Pay Commission, in the case of Government servants, the ceiling now is Rs. 20 Lakhs effective from 1 January 2016.
Therefore, considering the inflation and wage increase even in the case of employees engaged in the private sector, the Government is of the view that the entitlement of gratuity should be revised for employees who are covered under the Payment of Gratuity Act, 1972. Accordingly, the Government initiated the process for the amendment to the Payment of Gratuity Act, 1972.
AKT/VBA/SH
From India, Madras
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Payment of Gratuity Amendment Bill 2009.pdf