Last Published: Fri, Mar 16 2018. 01 41 PM IST
The Payment of Gratuity (Amendment) Bill had become necessary after the 7th pay commission had increased tax free gratuity from Rs10 lakh to Rs20 lakh. Photo: Priyanka Parashar/Mint
New Delhi: The Lok Sabha has passed a bill that seeks to allow organized sector employees to get tax-free gratuity up to Rs20 lakh on par with central government employees. The bill also permits the government to fix maternity benefit for women workers through an executive order.
The Payment of Gratuity (Amendment) Bill had become necessary after the seventh pay commission had increased tax-free gratuity from Rs10 lakh to Rs20 lakh.
The bill, which was passed on Thursday, will now be taken up in the Rajya Sabha and is unlikely to face opposition. The move is pro-worker and once passed, will benefit millions of organized sector workers in the country, a labour ministry spokesperson said.
The move comes at a time of various anti-government protests from farmers, traders and organized sector employees. Protests even from the Bharatiya Mazdoor Sangh, an affiliate of the ruling BJP, forced the Union government to indefinitely postpone the Indian Labour Conference (ILC) last month.
The Union cabinet had approved the bill in September 2017 and had then said that it will “increase the maximum limit of gratuity of employees in the private sector, and in public sector undertakings/autonomous organizations under government who are not covered under the Central Civil Services (Pension) Rules”.
The Payment of Gratuity Act, 1972, ensures gratuity payment to employees engaged in factories, mines, oilfields, railway companies, plantations, ports, shops or other establishments.
The bill, once passed by the parliament, will also allow the Union government to fix maternity benefit and gratuity payment in future without amending the bill again and again. So, if at any time the government wants to enhance these benefits in accordance with the benefits enjoyed by the central government employees, it can do so though executive orders without going to the parliament.
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