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3.5 lakh, in the light of the Sixth Pay Commission report that recommended raising it to Rs. The Bill has been passed by both the Houses of Parliament recently.
After having discussed the amendments introduced, let us briefly discuss the salient features of the Payment of Gratuity Act, 1972 so as to have an understanding of the basic provisions of the Act.
It has also been extended to motor transport undertakings employing ten or more workers.
Under the Act, gratuity is payable at the rate of fifteen days’ wages for every completed year of service or part thereof in excess of six months subject to a monetary ceiling of Rs.3.50 lakh.
The observations of the Supreme Court are as follows:- “Our conclusion should not be misunderstood that teachers although engaged in very noble profession of educating our young generation should not be given any gratuity benefit.The amendments made are as given below:- (i) The first amendment made by the Payment of Gratuity (Amendment) Act, 1984 inter alia provides for raising the wage limit for coverage from Rs.1000/- to Rs.1600/- per month and appointment of Inspectors. The amendments at (a) to (c) above were brought into force w.e.f. The amendment at (d) has not been brought into force so far. (v) The Fifth Amendment made by the Payment of Gratuity (Amendment) Act, 1998 has enhanced the ceiling on maximum amount of gratuity from Rs.In fact, this particular provision is being reviewed in view of certain subsequent developments. one lakh to Rs.3.50 lakh with effect from 24.9.1997.That is the subject matter solely of the Legislature to consider and decide”.Keeping in view the observations of the Supreme Court as mentioned above the definition of “employee” under section 2(e) in the existing Act has been proposed to be widened in keeping with the spirit of the Act.