Formal sector workers may soon be eligible for up to Rs. 20 lakh tax-free gratuity as central trade unions have agreed upon the proposal with the labour ministry in a tripartite consultation. The central trade unions have agreed on the proposal of doubling gratuity amount ceiling as an interim measure on the proposed amendment to Payment of Gratuity Act.
The trade unions have demanded the removal of conditions asking to have at least 10 employees in an establishment and minimum five years of service for payment of gratuity.
Current rules under the Payment of Gratuity Act require an employee to do minimum service of five years to become eligible for gratuity amount. Moreover, the Act applies to those establishments where the number of employees is not less than 10.
"While accepting the maximum payment limit of Rs. 20 lakh as an interim measure, the unions demanded that the ceilings/limit with respect to number of employees and years of service should be removed," the All India Trade Union Congress said in a statement.
The Unions have demanded application of the amended provision regarding maximum amount be made effective from January 1, 2016 as done in the case of central government employees. Besides the provision of 15 days wages for each completed year of service be raised to 30 days wages, the unions demanded.
The proposed amendment was demanded to bring the maximum ceiling amount to Rs. 20 lakh in line with the 7th Central Pay Commission's recommendations. The relevant amendment for central government employees was notified on July 25, 2016 and the enhanced amount ceiling was made effective from January 1, 2016.
The unions have also demanded that the delay of 8 months for employees covered under the Payment of Gratuity Act should not result in adversely affecting the interest of the concerned employees.
source ndtv profit
The trade unions have demanded the removal of conditions asking to have at least 10 employees in an establishment and minimum five years of service for payment of gratuity.
Current rules under the Payment of Gratuity Act require an employee to do minimum service of five years to become eligible for gratuity amount. Moreover, the Act applies to those establishments where the number of employees is not less than 10.
"While accepting the maximum payment limit of Rs. 20 lakh as an interim measure, the unions demanded that the ceilings/limit with respect to number of employees and years of service should be removed," the All India Trade Union Congress said in a statement.
The Unions have demanded application of the amended provision regarding maximum amount be made effective from January 1, 2016 as done in the case of central government employees. Besides the provision of 15 days wages for each completed year of service be raised to 30 days wages, the unions demanded.
The proposed amendment was demanded to bring the maximum ceiling amount to Rs. 20 lakh in line with the 7th Central Pay Commission's recommendations. The relevant amendment for central government employees was notified on July 25, 2016 and the enhanced amount ceiling was made effective from January 1, 2016.
The unions have also demanded that the delay of 8 months for employees covered under the Payment of Gratuity Act should not result in adversely affecting the interest of the concerned employees.
source ndtv profit
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