The Payment of Gratuity Bill was passed by in the Lok Sabha on 22nd March. The bill was introduced by Minister of Labour and Employment, Santosh Kumar Gangwar in December 2017.
The bill will enable the central government to set the ceiling for tax-free gratuity and the period of maternity leave. The bill provides women with 26 weeks of maternity leave which is more than double the increase from the current 12 weeks. It will also double the ceiling on gratuity from 10 to 20 lakhs.
The parliament which has been in protest for the past few weeks, cooperated for a while when Venkaiah Naidu brought up the motion to pass the bill. There was no real discussion on the matter of the bill, but a quick voice vote. Having been passed it will now be forwarded to the President to get his approval. The Bill will replace the existing Payment of Gratuity Act, 1972. The 10 lakh ceiling that was set in 2010 will be replaced by 20 lakhs.
For the 26 weeks of maternity, the women will be considered as being in continuous service. According to the bill, the gratuity will be paid to employees in the public and private sectors, factories, oilfields, mines, ports, and plantations. The gratuity is calculated on the basis of 15 days of wages for each year of continuous service. The maternity leave as has been waiting for upgradation since it was passed in 1961.
The bill allows the government to notify the fixed ceiling rather than amending it, this means that it can be revised according to the wage and inflation scenarios. The previous gratuity act was passed in 1972 for the government employees. The current bill was a recommendation as per the 7th pay commission. What’s more surprising about the bill than all its benefits is the fact that the Indian parliament was able to forget the protests and hurdles to passing a single motion and was able to come together to make this one decision at least.