There are many companies which pay gratuity of 30 days salary as against 15 days. It is either as per the contract of employment or any settlement with the unions. Under such settlements it would be defined what is wages. But I don't get where is it stated in the Payment of Gratuity Act that gratuity is payable only on basic wages and dearness allowance alone? Where is basic wages defined in the Act? It defines wages as 'total emoluments' earned by an employee including dearness allowance. The exclusion is given to commission, overtime wages, HRA, bonus or other allowance similar to it. But the establishments pay gratuity only on basic salary and DA. In many new generation companies, where there is no system of paying DA, the gratuity is paid base on basic wages. That is unfair and against the law. The legislators have never thought that the employers would interpret the law in such a way that it would be misused. That is why the pay structure of the new generation companies contain the least amount as basic pay and the higher amount under HRA and "other allowance".
(Sorry to say more on it because I am defending a case on similar issue before the Controlling Authority. I post the details later.)
From India, Kannur
4248(Sorry to say more on it because I am defending a case on similar issue before the Controlling Authority. I post the details later.)
From India, Kannur
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SBT Vs Asst. Labour Commissioner- Gratuity dismissed employee-LTS.PD F
FORM I(Application for Gratuity by an employee).doc