Gratuity

Querist : Anonymous (Querist) 05 January 2011 This query is : Resolved
.The BPE vide its order No 2 (70)/08-DPE(WC)dated26th Nov 08 has notified the Govts decision to revise the pay scales of the officers of PSUs wef 01 01 2007.The above said order gives the new pay scales and many other elements.Cl no13 reads as "the ceiling of gratuity of the executives and non unionised supervisors of the CPSEs would be raised to Rs 10 lakhs with effect from 1 1 2007.
One of the CPSE has implemented the pay revision as per the order.But it has refused to increase the ceiling wef 01 01 2007 to 23 05 10 saying that
the act is amended from 2010.Is this tenable?

THANK YOU MR TRIPATHI.
Mr Bansal, Would you kindly give the points clearly as I dont have access for the Gazette readily.

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Kirti Kar Tripathi (Expert) 06 January 2011

Section 3(5) of the Payment of Grauity Act lays down as under:-
Nothing in this section shall affect the right of an employee to receive better terms of gratuity under any award or agreement or contract with the employer.
Thus from your query it is apparent that order No 2 (70)/08-DPE(WC)dated26th Nov 08 has been notified as such it became contract of service of the employees. In view of the aforesaid provision of Gratuity Act i.e. 3(5) the employees covered under said notification are entitled for all the benefits according to the order No 2 (70)/08-DPE(WC)dated26th Nov 08. Therefore denial of payment of increase in ceiling of gratuity by the employers with effect from 01 01 2007 to 23 05 10 is illegal.

Ajay Bansal (Expert) 07 January 2011
See Gazatev Notificatios for enforcement carefuly.

Ajay Bansal (Expert) 07 January 2011
See Gazate Notification of enforcement carefuly.

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