Payment of Gratuity of Rs.20 lakhs is mandatory for all CPSEs

Payment of Gratuity of Rs.20 lakhs is mandatory for all CPSEs

Government of India
Ministry of Heavy Industries & Public Enterprises
Department of Public Enterprises

No.W-02/0036/2018-DPE (WC)-GL-XIX/18

Public Enterprises Bhawan,
Block No.14, CGO Complex,
Lodhi Road, New Delhi-110003.

Dated, the 10th July, 2018

OFFICE MEMORANDUM

Subject:- Payment of Gratuity to the employees of CPSEs – Clarification – regarding.

The undersigned is directed to refer to DPE’s OM No W-02/0028/2017- DPE(WC)-GL-XIII/17 dated 03.08.2017 which, inter-alia, stipulates the increase of ceiling of gratuity from Rs. 10 lakhs to Rs 20 lakhs w.e.f. 01.01.2017 for Executives and Non-Unionised Supervisors of CPSEs on IDA pattern of Pay and DPE’s OM No W-02/0020/2018-DPE(WC)-GL-XII/18 dated 11.04.2018, informing about the amendment in the Payment of Gratuity Act, 1972, regarding enhancement of ceiling of gratuity from Rs. 10 lakhs to Rs. 20 lakhs and effective date i.e. 29.03.2018.

2. This Department has received various representations from different stakeholders seeking clarification on the effective date of the enhancement of ceiling of Gratuity. Accordingly, the issue has been considered & clarified as follows:

a) The payment of Gratuity under DPE guidelines dated 03.08.2017, is subject to affordability of the CPSEs concerned effective for the period from 01.01.2017 till 28.03.2018, in respect of Executives and Non-Unionised Supervisors of CPSEs on IDA pay pattern, where, pay has been revised w.e.f. 01.01.2017

b) Whereas, on and after 29.03.2018, the payment of gratuity of Rs 20 lakhs is mandatory for all the CPSEs irrespective of their affordability as it is a statutory provision in light of the amendment in the Payment of Gratuity Act, 1972. This provision is applicable to all employees of all CPSEs.

c) Further, the Government decision on the basis of the recommendations of the 7th Central Pay Commission (CPC), regarding raising the Gratuity ceiling from Rs 10 lakhs to Rs 20 lakhs w.e.f. 01.01.2016 is not applicable to the employees of CPSEs.

3. All administrative Ministries/Departments are requested to bring these clarification to the notice of CPSEs (except Banking & Insurance Sector) under their administrative control for strict compliance.

4. This issues with the approval of the Competent Authority.

(Samsul Haque)
Under Secretary

Click to View the Order