Gratuity Act raises unions’ hackles



Gratuity Act raises unions’ hackles

The Payment of Gratuity (Amendment) Act, 2010, which was passed by Parliament in its last session, has raised the hackles of various trade unions.

The Act has raised the maximum limit of gratuity payable to an employee from Rs 3.5 lakh to Rs 10 lakh. Then why are the trade unions angry? It is the date of implementation of the Act, which has annoyed workers engaged in the private sector, public sector undertakings and the banking sectors, among others.

The upper limit of the gratuity for government employees was raised to Rs 10 lakh with effect from January 1, 2006, when the recommendations of the Sixth Pay Commission came into effect.

Immediately after that various trade unions demanded that a similar provision should be made for the employees of the private sector and public sector undertakings.

Conceding the demand, the government introduced the Payment of Gratuity (Amendment) Bill in Parliament. While passing the Bill, Parliament said the Act would come into force on such date “as the Central Government may, by notification in the official gazette appoint.”

The Act received the assent of the President on May 17 last and the Union Ministry of Labour and Employment notified it on May 24, stating that the Act would become effective from that day.

The trade unions say the notification is discriminatory. While for the government employees the maximum limit of gratuity has been revised with effect from January 1, 2006, for those of the private sector and the public sector undertakings it would be from May 24. Thus, the employees of these sectors, who retired between January 1, 2006 and May 24, 2010, would be sufferers.

SR Khatri, general secretary of the State Bank of India Employees Organisation, said the government had yielded to the pressure of various organisations of private employers, who did not want to pay enhanced gratuity to their employees retiring before May 24. He said the trade unions would agitate against this discrimination.

TN Goel, president of the State Bank of Indian Officers Federation, said it was highly unfair to the employees of the public sector banks, whose pay was revised with effect from November 2007. The notification should have taken care of this fact.

State secretary of the Haryana CITU Surender Malik said the enhanced gratuity should be payable to all with effect from January 1, 2006. He also demanded that various retirement benefits should not be subject to income tax.

Source: Tribuneindia


Comments

TEE KAY said…
IT IS VERY UNFAIR ON THE PART OF GOVT OF INDIA TO TAKE A DECISION NOT TO PAY THE GRATUITY WITH RETROSPECTIVE EFFECT I.E.,010106 AS IT HAS BEEN PAID TO CENTRAL GOVT EMPLOYEES. ALL THE OTHER PRIVATE AND PSUS SHOULD AGITATE FOR THIS PARTIALITY OF GOVT OF INDIA LABOUR MINISTRY.THE ARREARS OF GRATUITY SHOULD BE PAID TO ALL ELIGIBLE EMPLOYEES WITH RETROSPECTIVE EFFECT.ALL THE TRADE UNION LEADERS SHOULD THINK OVER THIS AND DO JUSTICE TO THEIR EMPLOYEES AS IMMEDIATELY AS POSSIBLE. T.K.RAO. KAKINADA. A.P.
Unknown said…
you have to fight for the injustice done to retired people not only for the effective date for revised gratuity amount, but also for 50% of Last drawn BASIC pay to the retires. the Banking fraternity should understand that one day they also will retire...donot cry then.
CJG said…
The Gratuity Amendment Act 2010 is confusing as 6th CPC says effective date is 01.01.2006 and dpe who is a nodal agency for govt. cpse's says effective date is 01.01.2007. Does the above Act of 2010 over rule the orders stated by DPE. Please inform as I am just too worried as we will be losing a huge amount of Rs.6.5 lakhs. Truely, then this is very unfair of the Govt.
CJG said…
It is most unfortunate that we the retirees of Central GOVT. CPSU's working under the guidelines of the DPE have come in for a rude shock. The Govt. initially approved the 2nd pay revision on 26.11.2008 by approving the enhanced gratuity of Rs.10 lakhs w.e.f. 01.01.2007. What made them change their minds? If the 6th CPC gratuity is to be implemented from 01.01.2006, then why this step motherly treatment to us? Are'nt we paying the same taxes as them? Hon. PM and FM, please look into this aspect as we have become easy targets and have lost out on Rs.6.5 lakhs which we were eagerly looking forward to.
Anonymous said…
Every body agrees that this is discriminatory: But how to correct this quickly? How to make the grivence of retired employees heard in the corridors of law makers; Only print media/visual media or employees organisations can only take the issue to that level. The hands of common citizen are not that lenghty to reach the corridor of law makers. Justice delayed is justice denied.
Anonymous said…
It is unfortunate that the additional gratuity of Rs 6.5 lcspaid to CPSU employees before May 24, 2010 is taxable whereas it is tax free for people retiring on orafter May 24, 2010. this is a discrimination. The law should be same for every one. gratuity amount is one on which retired employees plan for their rest of the life. Why it should be taxed for employees who have retired before may 24, 2010.?
Anonymous said…
The Monsoon session of Parliament will begin on July 26. We request the print media/visual media/employees organisations/Hon M.Ps, to take the issue to that level. Let us prey God.
Anonymous said…
Injustice in tax treatment on gratuity payment to psu officers:-Our tax consultant are advising to file writ in SC against the deduction of Income Tax on gratuity recieved before May 2010 by the PSU employees for the enhenced amount above 3.5 Lakhs.They are confident that it will go in the favour of Psu officer . Let us unite and file the case jointly.
Anonymous said…
The Bank employees retired between 1.1.2006 to 23.05.2010 have lost their life time savings due to Labour Ministry notification stating effective date as 24.05.2010.Discrimination on retirement benefits is beyond any body comprhension. Why the press/visual media do not highlight such discriminations?.why retired employees are put to mental torture even after retirement:Are they not entitled for peaceful retirement?.We appeal to the Public Sector Trade Unions to take up the issue through our Hon M.Ps, to deal with the Govt, which is reluctant to come to grips with reality.
Anonymous said…
In successive budgets, the Govt has handed huge concessions to corporates. Between 2007 and 2009, Tax revenue foregone on account of exemptions under corporate income tax amounted to crores. As per press reports, the 2 G Scam alone cost the exchequer Rs.50,000 crores. Experts have placed the size of Black Money Economy at anything between 40 per cent and 50 per cent of the GDP. Then why the Govt is quibbling over the IMPLEMENTATION OF GRATUITY ACT, 2010 w.e.f. 24TH MAY, 2010 FOR PSU/BANKS/ INSURANCE SECTORS. (GOVERNMENT EMPLOYEES HAVE GOT THE SAME w.e.f.01-01-2006). We are also paying Taxes regularly. It is tragic that the Government that gives huge corporate concessions and looses money in corruption is not considering implementation of increased ceiling from 01.01.2006 to the retirees. An aam aadmi sarkar fights the poor retirees. It is unfortunate that Trade Unions have dropped the issue like a hot potato in the year 2010. Affected retired employees may represent to Govt/Unions through their elected representatives to reconsider the matter in the Current Budget session 2011 of Parliament by mails, as a last resort.
Anonymous said…
As per press reports “Following discovery of Rs 1,731.57 crore in suspense account, the CBT raised rate of interest on provident fund deposits to 9.5 per cent for its 4.71 crore subscribers from 8.5 per cent which is being paid by EPFO since 2005-06″. This is one more reason why for people retired between 1.1.2006 to 23.05.2010 higher Gratuity Ceiling should be made applicable. People retired during the above period received lower interest rates on their long term savings while facing the silent killer “inflation”. Unions may take up this as one of the retirees issue during budget 2011.
Anonymous said…
The latest budget has proposed to lower the qualifying age of a senior citizen from 65 to 60. Simultaneously, the exemption limit for senior citizens is increased from Rs.2.40 lakh to Rs.2.50 lakh. A new category of senior citizens (80 and above ) has been announced. On the face of it, these measures promise much but in practice they will deliver little. But are these sufficient to ameliorate the lot of the senior citizens, who as the Finance Minister rightly says, deserve our special attention?. Tax exemptions on higher income are fine but quite obviously they are relevant only to those having matching income. It would be wonderful if a vast majority of senior citizens has taxable income beyond exempted limit. The retirement age in India varies from 58 to 60 in government and private sectors. Pension benefits wherever available will not offset the steep fall in incomes post-retirement . Many benefits that went with their jobs, notably medical benefits, are automatically scaled down or withdrawn. But it is precisely in the advancing years that health care costs will go up. The chance of a major illness impoverishing even a reasonably well off pensioner is real. The sad fact is that many of the today’s senior citizens did not have means and the wherewithal to plan for their retirement during their working years. While focusing on tax exemptions for senior citizens, we humbly request The Hon’ble Prime Minister of India, The Hon’ble Finance Minister of India, The Hon’ble Labour Minister of India, Hon M.Ps, who are well known for justice to all concerned, to consider the genuine demand of the PSU retirees from 1.1.2006 to 23.5.2010 and amend the date of implementation of Increase of Gratuity Ceiling of Rs.10 lakh, effective from 01-01- 2006 instead of 24th May, 2010. This will really help the few senior citizens who have retired since 2006.
tvnatham said…
The central trade unionsas well as the so called political parties which promote them as champions of working class are silent spectators and have not raised their voice till now.The government cannot recover the lakhs of crores lost in scams but the employers will not hesitate to pay the difference of gratuity to the affected employees but the concerned should take positive attitude to the genuine demand of all.
Viswanatham T
Anonymous said…
what is the link between reduction of age for income tax purpose and the ceiling date for the gratuity. 2 whether it will be applicable to act based people and service gratuity people ?
Anonymous said…
SRI TVNATH, you have correctly spelt the heart burning feelings of the retirees of PSUs and other private sectors in a befiting manner to the most selfish and proffessional politicians as well as some trade union leaders.The MPs have fought for a hike in their 'salaries' shamelessly in honourable PARLIAMENT and they are not worried about the lacs of working class who are also responsible for their entrance into parliamnet.The working class should never believe such kind of proffessional politicians and should teach a lesson at the appropriae time. ALL THE RETIREES are also should join to post comments on this issue of GRATUITY.
TKRAO.
t.k.rao said…
A GOOD QUESTION, I TOO GOT CONFUSED REGARDING THE RELEVANCE BETWEEN THE REDUCTION OF CEILING OF AGE FOR SENIOR CITIZENS FOR INCOMETAX AND PAYMENT OF GRATUITY FROM RETROSPECT DATE I.E., 010106? LET THE GENTLEMAN WHO POSTED THE COMMENT MAY PLEASE CLARIFY AND OBLIGE.
t.k.rao.
Anonymous said…
"INDIA CELEBRATES PUBLIC SECTOR DAY" Advertisements WERE RELEASED IN LEADING NEWS PAPERS ON 10.04.2011. In reality a section of retired employees are desperately waiting for some good news /Action Taken Report on the Gratuity subject matter. Equating/Clubbing, Public Sector employees with Private Sector is dubious. At a time when the Govt want to Privatize Public Sector in the name of Public Private Partnership,this is only a trick played to deny benefit to existing Public sector employees at that time. Let the interests of the retired PSU employees be protected
first. We will be nearing one year after the Gratuity change is effected. Winds of change are blowing across India. Let the PSU representatives represent the matter before senior Parliamentarians for their favorable consideration. Govt can prove their commitment to Public Sector employees by back dating effective date to 1.01.2006. Is any body listing:Satyagraha has the stength to shame the powerful.
Anonymous said…
Now it is 10 months, after the amendment is passed. Even the champions of working class have become silent on the issue. Not even a single Members of Parliament has raised the issue till date. Wait for tomorrow, day-after, month end, year end....or prey god.
Anonymous said…
So we have performed the first anniversary for the hope on payment of revised gratuity, which was murdered by the GOVT.& THE UNION /ASSNs. on 24/05/2010.We know that the departed soul will not rest in peace,still we will pray for it.
Anonymous said…
Civil society activists have an important role to play in a democracy by taking up critical issues that are ignored by the political class either by default or by design. Refer to civil activists.
adhikarala said…
what about the people who retire d before may2010. is it there fault?
Anonymous said…
Gone with the wind
Unknown said…
Employees of Pvt./PSUs retiring from July 2016 what will be eligibility for gratuity ceiling whether ₹20/- lakhs or 10 lakh. Pl confirm.
Anonymous said…
Pvt. sector and Psu employees will get enhanced gratuity only once the payment of gratuity act is amended and ceiling raised to Rs. 20 lakhs. last time there was a time lag of over 4 years from the date of implementation of hike in gratuity to central govt. employees ie 1/1/2006 and date of amendment of gratuity act was 24/05/2010.

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