Art Of Teaching

What is Gratuity-

Gratuity is an assistance received by a member of staff/ employee for services given to an establishment. For establishments enclosed under the Gratuity Act, this advantage is compensated when a member of staff completes five or more years of service with the establishment. An employee is entitled to gratuity when he/she resigns after working for 5 years with a sole employer, be superannuated or is laid off. In case of demise or incapacitation there is no minimum admissibility period.

Gratuity is a statutory right of Employee whoever completes 5 years in the same Schools and is a terminal benefit. (Taxguru.in)

PF and Gratuity are governed by Government act and must be followed by every private employer.

What is the formula of calculating gratuity of an employee-?

(15/26) multiplied by (No of Completed Years on Exit) multiplied by (Terminal Wages). The amount is subject to rupees 20,00,000/- effective from 29.03.2018. (Taxguru.in)

The Government laws state that, it is mandatory for employers to pay the amount of gratuity within 30 days. If the employer makes any delay in the payment of the gratuity, then the employer has to pay simple interest on this amount from the due date till the date of payment.

Please note that the time period if is over six months, it should be considered as one year.

If there is death of the employee, the nominee of the employee is paid the gratuity amount.

 Who is eligible for Gratuity?

Here are a few examples of employees who are entitled to receive Gratuity:

1. An employee should be qualified for retirement.

2. An employee reaches retirement.

3. An employee gives resignation after working for five continuous years with the same employer / organization.

4. An employee dies or suffers from any incapacity due to illness or accident.

Can any private organization deny gratuity to its employees?

If you refer to the government acts, it is compulsory for employers to pay the amount of gratuity within 30 days. However, if the employer does not pay on time and there is a delay in the payment of the gratuity, then the employer has to pay simple interest on the gratuity amount from the date it is payable till the date of payment.

Can any employer deny to pay gratuity on the ground of limitation?

No employer can reject gratuity to the employee on the ground of limitation. No doubt, there is a specified period of 30 days for an employee to file a notice to the employer but a claim for gratuity amount can never be invalid.

Can an employer deduct Gratuity from your salary?

No, an employer cannot do so unless the same is specified in the CTC signed by you at the time of joining the services. It is the basic duty of the organization to make provisions in their yearly budget for the same.  

What are the available remedies for an employee if the employer refuses to pay gratuity and pending dues to me?

You need to file a Civil Suit.If there are monetary constraints, you can file a complaint in Labour Court. You do not even require to hire any one for this.

Whether Employees of Private schools are covered under the Maharashtra Employees of Private Schools (Conditions of Service) Regulation Act, 1977 and M.E.P.S Rules 1981?

Please refer to 1. Short title, extent and commencement:

(4) Application of the Act, (6) Brief Scheme of the Act -1 and 2, (7) – Employees of Private schools are covered. So even the pay scales, leave encashment rules and vacation pay rules along with P.F and gratuity rules are applicable

Is gratuity applicable to private school teachers?

1.As per M.E.P.S S. 2 (8)- Teacher: Term “employee”: is extended to teachers Sec. 2 ( e ). Therefore, Teachers are brought under the purview of: employee: as defined in Section e and Sec. 2 (a) states that continuity of service means the service rendered before or after commencement of the Act. For the purpose of determination of the amount of gratuity, period of employment prior to the amendment has to be taken into consideration. Teachers are entitled to gratuity from the date of appointment till the date of retirement. (Mrs. Ananta Vishwanathan Vs Shri Narayana Guru High School & Ors, 2011(2) CLR 975.

Lawfully, there are many contentions to prove the same.

 Gratuity act

1]As per the Gratuity Act, 1972, an employee is paid 15 days salary as gratuity in each year of his service. In this act, employees are those whom the company puts on the pay roll, the trainees do not get gratuity. No tax has to be paid on the amount received up to 20 lakhs under the gratuity, as well as this law is applicable in such establishments where the number of employees is at least 10.

2]The Payment of Gratuity (Amendment) Act 2018 provides Social Security to Teachers working in educational institution (i.e., Private Schools) having 10 or more employees on any day in the preceding 12. This is subject to a ceiling limit of 20,00,000/- effective from 29.03. 2018 with retrospective effect.

Legal Provisions on Employer for payment of Gratuity- (Refer Section 7 (1), 7(2) & 7(3) of The Payment of Gratuity Act 1972 (a) (Taxguru.in)

 (1) A person who is eligible for payment of gratuity under this Act or any person authorized, in writing, to act on his behalf shall send a written application to the employer, within such time and in such form, as may be prescribed, for payment of such gratuity.

 (2) As soon as gratuity becomes payable, the employer shall, whether an application referred to in sub-section (1) has been made or not, determine the amount of gratuity and give notice in writing to the person to whom the gratuity is payable and also to the controlling authority specifying the amount gratuity so determined.

 (3) The employer shall arrange to pay the amount of gratuity within thirty days from the date it becomes payable to the person to whom the gratuity is payable.

 (3A) If the amount of gratuity payable under sub-section (3) is not paid by the employer within the period specified in sub-section (3), the employer shall pay, from the date on which the gratuity becomes payable to the date on which it is paid, simple interest at such rate, not exceeding the rate notified by the Central Government from time to time for repayment of long-term deposits, as that Government may, by notification specify: Provided that no such interest shall be payable if the delay in the payment is due to the fault of the employee and the employer has obtained permission in writing from the controlling authority for the delayed payment on this ground.

 For  all private school teachers who retired or resigned or will retire shortly or whose services are terminated or who left after 5 years of continuous service and ones like Madhura Natekar  who did not know the rules and did not demand the same though she was in acute need of funds but was also refused even a loan to be cut from her salary on monthly basis by the Management even though she gave her precious best . Also, all the best to the pre- primary teachers and school teachers and the sole clerk who were given gratuity by the previous Management. Maybe they knew the rules better.  

More Power Manifestations for Private School Teachers who slog day and night to bring up the standard of Private schools but are not given their due retirement benefits and have to lead a live of monetary insufficiency or be at the mercy of their spouses and children.