Dear Seniors,
I want to know whether any employer, a. government autonomous organization, b. Private organization, can withdraw from paying gratuity. Can an employer declare that henceforth no gratuity will be paid to any employee?
Please answer.
From India, Asansol
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23I want to know whether any employer, a. government autonomous organization, b. Private organization, can withdraw from paying gratuity. Can an employer declare that henceforth no gratuity will be paid to any employee?
Please answer.
From India, Asansol
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Dear Harshal,
Payment of gratuity to eligible employees is binding on the company, and gratuity is an inherent right of an eligible employee. Therefore, this right cannot be deprived by any employer.
Thanks and regards,
Ninad Joshi
From India, Mumbai
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Payment of gratuity to eligible employees is binding on the company, and gratuity is an inherent right of an eligible employee. Therefore, this right cannot be deprived by any employer.
Thanks and regards,
Ninad Joshi
From India, Mumbai
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Dear Harshal,
As per sec. 5 of the Gratuity Act – the appropriate Govt. may exempt any establishment for operation of the Act …… Provided if the Govt. is of the opinion that the employees of the establishment are in receipt of gratuity payment or pensionary benefits not less favorable than the benefits conferred under the Act.
So if any establishment provides any pensionary benefits to its employees more favorable than the benefits provided in the Act, only it can be done that too with the prior approval of the appropriate Govt. otherwise not.
Not in straightway as mention in your query whether it a govt. autonomous or private organization.
From India, Delhi
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As per sec. 5 of the Gratuity Act – the appropriate Govt. may exempt any establishment for operation of the Act …… Provided if the Govt. is of the opinion that the employees of the establishment are in receipt of gratuity payment or pensionary benefits not less favorable than the benefits conferred under the Act.
So if any establishment provides any pensionary benefits to its employees more favorable than the benefits provided in the Act, only it can be done that too with the prior approval of the appropriate Govt. otherwise not.
Not in straightway as mention in your query whether it a govt. autonomous or private organization.
From India, Delhi
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Gratuity act is applicable to the establishment coming under section 1(3) of POG. It is not applicable for Government organisations unless notified by Government.
From India, New Delhi
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From India, New Delhi
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It is wrong to say that POG is not applicable to Government organizations. It is applicable to factories, mines, plantations, port railways, shops, and commercial establishments belonging to or under the control of the Government. However, it is not applicable to government servants governed by separate rules. In Kerala, the POG Act is applicable to the cooperative sector as well.
Varghese Mathew
09961266966
From India, Thiruvananthapuram
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Varghese Mathew
09961266966
From India, Thiruvananthapuram
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Dear Mr. Pkjain,
If the employees are under the New Pension Scheme, which virtually has no pensionary benefits, can the organization, which was established by a special act of parliament, withdraw the payment of gratuity?
Mr. Varghese, is there any written evidence of your information that it is not applicable to government servants governed by separate rules?
What about private sector organizations – can they do it?
Thank you.
From India, Asansol
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If the employees are under the New Pension Scheme, which virtually has no pensionary benefits, can the organization, which was established by a special act of parliament, withdraw the payment of gratuity?
Mr. Varghese, is there any written evidence of your information that it is not applicable to government servants governed by separate rules?
What about private sector organizations – can they do it?
Thank you.
From India, Asansol
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Mr. Harshal,
Please see section 1(3) of the POG Act 1972 showing the applicability of the Act, which does not cover Government departments or servants other than those mentioned in clauses (a), (b), and (c) of section 1(3). Government servants governed by state/central service rules have separate provisions for gratuity. If the organization is one mentioned in section 1, then its private or public nature makes no difference. For more information, please contact me.
Varghese Mathew
09961266966
From India, Thiruvananthapuram
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Please see section 1(3) of the POG Act 1972 showing the applicability of the Act, which does not cover Government departments or servants other than those mentioned in clauses (a), (b), and (c) of section 1(3). Government servants governed by state/central service rules have separate provisions for gratuity. If the organization is one mentioned in section 1, then its private or public nature makes no difference. For more information, please contact me.
Varghese Mathew
09961266966
From India, Thiruvananthapuram
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Hi Harshal1,
Once a private sector organization comes under the Payment of Gratuity Act, it can never be withdrawn. It is binding for the lifetime of the company. You can visit this link for a quick but informative brief on POG: [Labour laws for companies in India](http://www.careerprospect.net/JobSeeker/labour-laws-5.aspx).
Have a nice Diwali.
From India, Bangalore
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Once a private sector organization comes under the Payment of Gratuity Act, it can never be withdrawn. It is binding for the lifetime of the company. You can visit this link for a quick but informative brief on POG: [Labour laws for companies in India](http://www.careerprospect.net/JobSeeker/labour-laws-5.aspx).
Have a nice Diwali.
From India, Bangalore
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Dear All,
I am reproducing the sections 1(3) and (3-A) as follows:
1(3): It (Act) shall apply to -
Every factory, mine, oilfield, plantation, port, and railway company;
Every shop or establishment within the meaning of any law for the time being in force in relation to shops and establishments in a State, in which ten or more persons are employed, or were employed, on any day of the preceding twelve months;
Such other establishments or class of establishments, in which ten or more employees are employed, or were employed, on any day of the preceding twelve months, as the Central Government may, by notification, specify in this behalf.
1(3-A): A shop or establishment to which this Act has become applicable shall continue to be governed by this Act, notwithstanding that the number of persons employed therein at any time after it has become so applicable falls below ten.
Now can anybody tell all the members where it is mentioned about the private sector or public sector?
According to my understanding, the POG Act is applicable irrespective of whether it is the private sector or the public sector. And once the Act is applicable, it remains applicable forever.
I am also reproducing section 5 as follows:
5. Power to exempt -
1. The appropriate Government may, by notification, and subject to such conditions as may be specified in the notification, exempt any establishment, factory, mine, oilfield, plantation, port, railway company, or shop to which this Act applies from the operation of the provisions of this Act if, in the opinion of the appropriate Government, the employees in such establishment, factory, mine, oilfield, plantation, port, railway company, or shop are in receipt of gratuity or pensionary benefits not less favorable than the benefits conferred under this Act.
2. The appropriate Government may, by notification and subject to such conditions as may be specified in the notification, exempt any employee or class of employees employed in any establishment, factory, mine, oilfield, plantation, port, railway company, or shop to which this Act applies from the operation of the provisions of this Act if, in the opinion of the appropriate Government, such employee or class of employees are in receipt of gratuity or pensionary benefits not less favorable than the benefits conferred under this Act.
3. A notification issued under subsection (1) or subsection (2) may be issued retrospectively to a date not earlier than the date of the commencement of this Act, but no such notification shall be issued so as to prejudicially affect the interest of any person.
According to me, this section has no meaning. You are exempted from the operation of the provisions of the Act and not exempted from making payment of Gratuity.
I hope Dear Harshal got the answer.
Thanks and regards.
Keshav Korgaonkar
Shantadurgaent.com, Insurance Advisors, Corporate Advisors, Legal Advice, Wage and salary, Labour Compliance Audit, SSI registration, NOC from
From India, Mumbai
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I am reproducing the sections 1(3) and (3-A) as follows:
1(3): It (Act) shall apply to -
Every factory, mine, oilfield, plantation, port, and railway company;
Every shop or establishment within the meaning of any law for the time being in force in relation to shops and establishments in a State, in which ten or more persons are employed, or were employed, on any day of the preceding twelve months;
Such other establishments or class of establishments, in which ten or more employees are employed, or were employed, on any day of the preceding twelve months, as the Central Government may, by notification, specify in this behalf.
1(3-A): A shop or establishment to which this Act has become applicable shall continue to be governed by this Act, notwithstanding that the number of persons employed therein at any time after it has become so applicable falls below ten.
Now can anybody tell all the members where it is mentioned about the private sector or public sector?
According to my understanding, the POG Act is applicable irrespective of whether it is the private sector or the public sector. And once the Act is applicable, it remains applicable forever.
I am also reproducing section 5 as follows:
5. Power to exempt -
1. The appropriate Government may, by notification, and subject to such conditions as may be specified in the notification, exempt any establishment, factory, mine, oilfield, plantation, port, railway company, or shop to which this Act applies from the operation of the provisions of this Act if, in the opinion of the appropriate Government, the employees in such establishment, factory, mine, oilfield, plantation, port, railway company, or shop are in receipt of gratuity or pensionary benefits not less favorable than the benefits conferred under this Act.
2. The appropriate Government may, by notification and subject to such conditions as may be specified in the notification, exempt any employee or class of employees employed in any establishment, factory, mine, oilfield, plantation, port, railway company, or shop to which this Act applies from the operation of the provisions of this Act if, in the opinion of the appropriate Government, such employee or class of employees are in receipt of gratuity or pensionary benefits not less favorable than the benefits conferred under this Act.
3. A notification issued under subsection (1) or subsection (2) may be issued retrospectively to a date not earlier than the date of the commencement of this Act, but no such notification shall be issued so as to prejudicially affect the interest of any person.
According to me, this section has no meaning. You are exempted from the operation of the provisions of the Act and not exempted from making payment of Gratuity.
I hope Dear Harshal got the answer.
Thanks and regards.
Keshav Korgaonkar
Shantadurgaent.com, Insurance Advisors, Corporate Advisors, Legal Advice, Wage and salary, Labour Compliance Audit, SSI registration, NOC from
From India, Mumbai
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Dear all,
As mentioned above, government organizations governed by special service rules do not come within the ambit of the Payment of Gratuity Act. But does that mean they can arbitrarily withdraw from the payment of gratuity? Given the fact that it is under the New Pension Scheme, which is not operational in its full form - only Tier-I is active, so pensionary benefits are uncertain.
I would also like to mention that banks do not fall under this act; they follow the Desai Award for terminal benefits. Can they also opt out of the payment of gratuity at any time?
Thank you.
From India, Asansol
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As mentioned above, government organizations governed by special service rules do not come within the ambit of the Payment of Gratuity Act. But does that mean they can arbitrarily withdraw from the payment of gratuity? Given the fact that it is under the New Pension Scheme, which is not operational in its full form - only Tier-I is active, so pensionary benefits are uncertain.
I would also like to mention that banks do not fall under this act; they follow the Desai Award for terminal benefits. Can they also opt out of the payment of gratuity at any time?
Thank you.
From India, Asansol
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Dear All,
A central government autonomous body is registered under the Society Registration Act, 1860. The employees of the institute are covered under the EPFO. The institute pays gratuity to the employees who retire from the institute but is holding the gratuity payment to the employees who are appointed on a five-year contract period and have resigned after serving more than five years to join another government institute. Is the action legally sustainable, or does the institute have to necessarily pay gratuity to all of its employees? Does the institute have to compulsorily follow the Gratuity Act 1972, or can it still continue to follow the CCS (pension) rule, which does not provide for gratuity payment to employees appointed on or after 1/1/14 and is replaced by NPS? It may be noted that the institute is still continuing with the EPFO scheme and has not switched to the NPS.
Regards,
Hridan
From India, Delhi
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A central government autonomous body is registered under the Society Registration Act, 1860. The employees of the institute are covered under the EPFO. The institute pays gratuity to the employees who retire from the institute but is holding the gratuity payment to the employees who are appointed on a five-year contract period and have resigned after serving more than five years to join another government institute. Is the action legally sustainable, or does the institute have to necessarily pay gratuity to all of its employees? Does the institute have to compulsorily follow the Gratuity Act 1972, or can it still continue to follow the CCS (pension) rule, which does not provide for gratuity payment to employees appointed on or after 1/1/14 and is replaced by NPS? It may be noted that the institute is still continuing with the EPFO scheme and has not switched to the NPS.
Regards,
Hridan
From India, Delhi
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Societies registered under the Societies Registration Act, 1860 were already brought under the purview of the Payment of Gratuity Act, 1972 by means of a notification issued under section 1(3)(c) of the Act effective from August 22, 1997. The existence of any scheme under any law for Provident Fund and Pension cannot take away the benefit of gratuity under the Payment of Gratuity Act, 1972.
Irrespective of the nature of employment, whether regular or on a contract basis, if the employee renders continuous service of not less than five years in an establishment covered by the provisions of the Payment of Gratuity Act, 1972 on the date of termination of his employment, he should be paid gratuity.
From India, Salem
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Irrespective of the nature of employment, whether regular or on a contract basis, if the employee renders continuous service of not less than five years in an establishment covered by the provisions of the Payment of Gratuity Act, 1972 on the date of termination of his employment, he should be paid gratuity.
From India, Salem
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Dear Sir,
Thank you for your reply. I would like to know if it would be appropriate for me to file a complaint before the labor commissioner for non-payment of gratuity, or if I should approach the CAT. My employer in this case is a central autonomous institute, and the gratuity payment has been on hold for the last 30 months due to a lack of clarification from the parent ministry. Can the labor commissioner adjudicate in such cases? Please advise.
Regards,
Deepak B
From India, Delhi
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Thank you for your reply. I would like to know if it would be appropriate for me to file a complaint before the labor commissioner for non-payment of gratuity, or if I should approach the CAT. My employer in this case is a central autonomous institute, and the gratuity payment has been on hold for the last 30 months due to a lack of clarification from the parent ministry. Can the labor commissioner adjudicate in such cases? Please advise.
Regards,
Deepak B
From India, Delhi
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Since your employer is a Central Institute, the appropriate government is the Central Government. Engage a counsel and file a claim before the area Controlling Authority under the Payment of Gratuity Act, 1972, with a special prayer for interest until the actual payment of the amount.
From India, Salem
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From India, Salem
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Dear Sir,
Thank you for your response. As per my discussion with other friends, the ALC (Central) cannot adjudicate on matters pertaining to the payment of gratuity in cases of employees of central autonomous bodies who are bound by separate service rules, i.e., CCS rules. Please clarify.
Regards,
Hridan
From India, Delhi
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Thank you for your response. As per my discussion with other friends, the ALC (Central) cannot adjudicate on matters pertaining to the payment of gratuity in cases of employees of central autonomous bodies who are bound by separate service rules, i.e., CCS rules. Please clarify.
Regards,
Hridan
From India, Delhi
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Dear Sir,
Can you please reply to my query dated 11/8/16? Do the employees of autonomous bodies, who are covered by CCS rules, file a complaint before the labor office for non-payment of gratuity? Furthermore, how can an employee prove that an autonomous body is necessarily covered under the POG Act?
Regards,
Hridan
From India, Delhi
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Can you please reply to my query dated 11/8/16? Do the employees of autonomous bodies, who are covered by CCS rules, file a complaint before the labor office for non-payment of gratuity? Furthermore, how can an employee prove that an autonomous body is necessarily covered under the POG Act?
Regards,
Hridan
From India, Delhi
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Dear Hridan,
Your query involves a situation abundantly ripe with questions of law and facts, and therefore whatever answers given by others would only be subjective interpretations. With this assumption, I offer my reply to your query as follows:
(1) For the sake of clear understanding, you could've mentioned the name of the Autonomous body, its functions, the circumstances under which its constitution was changed, the structure of its staffing i.e., the existence of independent recruitment by the body and the scheme of deputation from the Central Govt, and the like.
(2) By virtue of the notification cited supra, it is an establishment covered by the application of the P.G Act, 1972.
(3) If its staff comprises deputationists from Govt. Departments for whom the C.C.S(Pension) Rules are applicable, they are excluded from the definition of the term "employee."
(4) Even other employees would also stand excluded if the CCS(P) Rules or any other Rules providing for gratuity are applicable to them.
(5) When the CCS(P) Rules are not specifically applicable to persons entitled to any CPF, the contract employees for whom EPF subscriptions are contributed by the establishment automatically come out of the coverage of the CCS(P) Rules, and only the gratuity as per the PG Act, 1972, comes into operation.
(6) It is also noteworthy that the CCS(P) Rules stipulate a condition for entitlement of gratuity for contract employees under it, only if it is so provided for in the contract. Perhaps on this point, the establishment awaits clarification from the concerned Ministry, I think.
(7) If the delay is inordinate, you can move the High Court of the State under its writ jurisdiction and pray for payment of gratuity together with interest.
From India, Salem
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Your query involves a situation abundantly ripe with questions of law and facts, and therefore whatever answers given by others would only be subjective interpretations. With this assumption, I offer my reply to your query as follows:
(1) For the sake of clear understanding, you could've mentioned the name of the Autonomous body, its functions, the circumstances under which its constitution was changed, the structure of its staffing i.e., the existence of independent recruitment by the body and the scheme of deputation from the Central Govt, and the like.
(2) By virtue of the notification cited supra, it is an establishment covered by the application of the P.G Act, 1972.
(3) If its staff comprises deputationists from Govt. Departments for whom the C.C.S(Pension) Rules are applicable, they are excluded from the definition of the term "employee."
(4) Even other employees would also stand excluded if the CCS(P) Rules or any other Rules providing for gratuity are applicable to them.
(5) When the CCS(P) Rules are not specifically applicable to persons entitled to any CPF, the contract employees for whom EPF subscriptions are contributed by the establishment automatically come out of the coverage of the CCS(P) Rules, and only the gratuity as per the PG Act, 1972, comes into operation.
(6) It is also noteworthy that the CCS(P) Rules stipulate a condition for entitlement of gratuity for contract employees under it, only if it is so provided for in the contract. Perhaps on this point, the establishment awaits clarification from the concerned Ministry, I think.
(7) If the delay is inordinate, you can move the High Court of the State under its writ jurisdiction and pray for payment of gratuity together with interest.
From India, Salem
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Payment of Gratuity Act, 1972 & The Rules.ppt
THE PAYMENT OF GRATUITY ACT 1972.doc