The government would bring in the budget session of Parliament, a comprehensive bill on gratuity which would address issues like raising the gratuity ceiling from Rs. 3.5 lakh, in the light of the Sixth Pay Commission report that recommended raising it to Rs. 10 lakh.

The proposed bill may take into account broadening the scope of gratuity benefits to cover contract labour, unorganised labour, seasonal labour and farm labour among others, the Minister of State for Labour Harish Rawat assured the Rajya Sabha members on Friday. “We are discussing this with the stakeholders,” he added.

The Minister was responding to clarifications sought by members on the Payment of Gratuity (Amendment) Bill, 2009. The Bill that widens the definition of employees for the purpose of receiving gratuity, will benefit over 60 lakh teachers. It covers teachers in private institutions with retrospective effect from April 3, 1997.

The Bill was passed in the Rajya Sabha by a voice vote. It was approved by the Lok Sabha on December 16.

“Over 60 lakh teachers will be benefited by this amendment,” Mr. Rawat said adding that the government had made the amendment with retrospective effect from 1997, accepting the suggestion of the Standing Committee.

‘Employee’ definition

Now, the definition of “employee” has been widened for the purpose of gratuity to include any person who is employed for wages, other than an apprentice. It also clears that the terms of such employment may be expressed or implied, in any kind of work, manual or otherwise.

The government was in the process of changing the law since 2004 after the Supreme Court pointed out that teachers were not covered under the definition of ‘employee’ under the Payment of Gratuity Act though they are covered under the Employees Provident Fund law. The word ‘teacher’ was, however, not mentioned in the Bill on the advice of the Law Ministry, the Minister pointed out.

He ruled out reducing the minimum 5-year norm for availing the benefits of gratuity. “If we reduce the number of years, it will be like wages and not a terminal benefit or a social security that it is meant to be.”

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