Monday, May 31, 2010


Gazette Notification has been issued by the Labour Ministry, Government of India for the purpose of notifying the date of effect of the revision in the Gratuity Ceiling payable under the Payment of Gratuity (Amendment) Act 2010. The date of effect has been made as 24th May 2010.Click on the link below to view circular issued by AIBOC on the subject.



  2. AIBOC in one of their internal circulars have stated that they were
    disappointed with the current notification of Govt on Gratuity, since
    it resulted in frustration to all those who retired between 1.1.2006
    to 23rd May 2010. The impact of the notification is that it is
    prospective and all those who retire/resign on or after 24th May 2010
    shall be eligible for the benefit of the revised ceiling. For those
    who had retired earlier, AIBOC has promised to pursue the matter after
    due consultation with other organizations as to the manner in which
    the issue needs to be taken up with the Government. They also
    pointed out that they were examining the possibility of legal remedy
    in the matter in view of a large number of representations they have
    been receiving in the matter.

    The Madras High Court on Tuesday vacated an interim stay on the
    implementation of a bipartite settlement arrived at earlier this year
    between the IBA and the United Forum of Bank Unions (UFBU) on this
    matter.With the interim stay having been vacated, the Indian Banks'
    Association (IBA) on Tuesday directed the chief executives of public
    sector banks to immediately seeking option from employees, both
    serving and retirees, who had not opted for the scheme earlier. With
    the lifting of stay by Madras Court, AIBOC should concentrate their
    efforts for quick redressal of the Gratuity problem so the gratuity
    benefit can be utilized by retirees between Nov 2007 to 23.05.2010,
    for exercising pension option.

  3. THE loss to pensioners retired in between 1.1.2006 TO 24.5.2010, on account prospective implementation is substantial. Even after calculation of gratuity on revised pay scales, the loss to the retirees is substantial. Most of the retired employees are not aware of this as they are retired and settled at different places.Except that some people have made appeals, there is no strong follow up from any level,on the subject matter, as it has affected only a small number of people.Union leaders have also done their service by sending a letter... etc. There is not much publicity on this in print/visual media till date. Alternatives like contacting/mobilizing affected people is essential. Now that M.Ps’ are in a hurry to hike their
    salaries with retrospective effect, retired employees/employees
    unions/Pensioners associations ( LIC/Banks/PSU) should renew their
    efforts/requests. we feel that in case some senior opposition leaders are contacted personally by some group and they are asked to raise the issue in both Houses of Parliament, so that government may be advised to think about the same.The Govt should be requested to look into the matter along with M.Ps' salary hike.The Govt took two years to get the bill passed in Lok Sabha and when cleared given prospective effect. Why this health anxiety to retirees between 1.1.2006 to 23.5.2010 for the lost 2 years.As a last minute effort retired people can make an appeal to our M.P Shri.Lalu Prasad Ji.Prey god for good luck.Its worth doing.

  4. For Bankers retired between 01.01.2006 to 23.05.2010 the gratuity was paid based on Service Regulations. AIBEA/AIBOC/NCBE should link demand for implementation of higher gratuity limit of Rs.10 lakhs to 9th BPS with IBA so that Bankers retired before 23.05.2010 get higher gratuity benefit automatically.

  5. Shri.A.D.Nagpal, the man who uncovered lost EPF funds makes interesting reading. The issue strengthens the need for passing enhanced Gratuity benefit to people retired between 1.1.2006 to 23.05.2010. From 1992 till today, there has been a drastic reduction in the rate of interest. Why unions/Retired Pensioners Associations are reluctant to take up the Gratuity issue?.

  6. The much awaited year-end has come and gone, but prayers of retired
    employees seem to have gone unanswered. "Banking Solutions " have put on their Web
    sight the reply of Labour Ministry to Mr D C Ahuja. In the said
    letter, Labour Ministry has clearly indicated that "the decision to
    make the Payment of Gratuity Act, 1972 (amendment), relating to
    enhanced gratuity wef 24/05/2010, was taken through consultation with
    all concerned stakeholders, all State Governments, major associations
    of employers, employees and different Ministries of Central Government
    and keeping in view overall economic condition and employer's capacity
    to pay". Moreover, in the same letter Labour Ministry has indicated
    that an employee has to right to receive better terms of gratuity
    under any award or agreement or contract with the employer". In view
    of the above, certain relevant questions were raised on this sight for
    union leaders to reply. One of the important question as to Why our
    union leaders are silent and are not aggressively taking up with the
    IBA for such a separate agreement for payment of enhanced gratuity as
    a one time gesture to such employees?...still remains unanswered.

    But the recent Aiboc Circular CLAIMS- " As a result of our concerted
    efforts with the Labour /Finance Ministry, the ceiling of gratuity was
    enhanced from Rs. 3.50 lac to Rs.10.00 lac w.e.f. 24.05.2010. under
    the payment of Gratuity (Amendment) Act 2010.". Now it is for the
    retired people to come to their own conclusion to conclude the

    There is no relief in the New Wage Settlement on this issue.
    Because of this the employees retired even in Jan to April 2010, were
    put to a great financial loss of their life time, due to no fault of
    their. Juniors retiring after 24.05.2010 receive better retirement
    benefit than recently retired seniors prior to the cut off date.
    During the last decade the probability of retired 60 year old
    surviving to age of 85 doubled, from about 20 per cent chance to a 40
    per cent chance.

    However the increased life expectancy has not been accompanied by more
    years of perfect health. Average "morbidity " or the period of life
    spent with serious disease or
    loss of functional mobility, has actually increased in the last few
    ears. A person retired in Jan 2010 and a person retired after
    24.05.2010 have to leave in the same time space after June 2010. We
    have reached an alarming stage when we cannot rely on anything. The
    policies are influenced by various interests and subjective decisions
    are made by the Government. At a time when Onions are sold at a rate
    of Rs.80 K.G, Only the removal of the anomaly on the effective date
    can end the agony of every honest retired person undergoes in his
    day-to-day affairs.

    Let us remember that the issue is different from wage revision
    issue and most of the people affected were old timers who were
    soldiers of the Union at initial years of formations of banking
    unions. Whatever it may be, the poor and middle class retired, will be
    circling in their own orbits and will not be able to move up unless
    necessary support is given to them. Some innovative approaches on this
    issue including legal services are
    worth exploring for way forward, instead of forgetting the issue. We
    appeal to retired Bankers/ Bank Pensioners Associations through
    these Columns, to taken up the issue in the Year 2011.

  7. Let us forget GRATUITY INCREASE for the time being.You will agree that after the grand improvements in communication channels we were being advised of our D A INCREASE well in advance by ALL BANKING SOLUTIONS &PAY COMMISSION & a number of other web sites.There has been an unprecedented, alarming and dangerous price increase recently leaving the people in dire straits.My doubt is that these websites are withholding the announcement, possibly under instructions from the POWERS THAT BE.Even manipulation of figures to show reduced CPI is possible so that the D A payable is reduced and there is less embarassment for the POWERS and more inconvenience for the public..Will anybody throw further light on this please?

  8. In the case of gratuity revision individual moving of the court will not help as the court has already refused to admit the pettion suggesting that the EMPLOYEE can get a relief only if there is already an agreement with the EMPLOYER for an enhancement when ever the ceiling is revised.Most of the present leaders are due for retirement shortly and are happy that their interest has been taken care of.For you and me they will not take any effort.We are due for hefty D A INCREASE from FEBRUARY 2011,but no website is throwing any light on this and are MUM.I FEAR MANIPULATION IN THE FIGURES TO ARRIVE AT REVISED D A to reduce the outflow of funds. GOD ONLY KNOWS WHERE THIS WILL LEAD TO.

  9. Defeat is not final when you fall down. It is final when you refuse to get up.I would like to give you the following feedback,to have direct
    contact with Sri Venkatesh Shriyan,Mumbai,Organising Secretary for the
    newly formed UNITED FORUM OF PF OPTEES,fighting against the anomolies
    of the settlement,along with the injustice caused due to the unethical fixation of applicable date with regard to Gratuity Ceiling
    Enhancement. I am giving the email of Shri Venkatesh and his mobile number below. and mobile No. is 09869798399

  10. In successive budgets, the Govt has handed huge concessions to corporates. Between 2007 and 2009, Tax revenue foregone on account of exemptions under corporate income tax amounted to crores. As per press reports, the 2 G Scam alone cost the exchequer Rs.50,000 crores. Experts have placed the size of Black Money Economy at anything between 40 per cent and 50 per cent of the GDP. Then why the Govt is quibbling over the IMPLEMENTATION OF GRATUITY ACT, 2010 w.e.f. 24TH MAY, 2010 FOR PSU/BANKS/ INSURANCE SECTORS. (GOVERNMENT EMPLOYEES HAVE GOT THE SAME w.e.f.01-01-2006). We are also paying Taxes regularly. It is tragic that the Government that gives huge corporate concessions and looses money in corruption is not considering implementation of increased ceiling from 01.01.2006 to the retirees. An aam aadmi sarkar fights the poor retirees. It is unfortunate that Trade Unions have dropped the issue like a hot potato in the year 2010. Affected retired employees may represent to Govt to reconsider the matter in the Current Budget session 2011 of Parliament by mails, as a last resort.

  11. Let retirees file a PIL/writ petition in Court(s) with regard to modification of effective date of Increase in Gratuity Ceiling to Rs.10 lacs from 24.05.2010 to 01.01.2006, to bring parity with Central Govt Employees.


  13. Recent Cir Circular No.7:V:2011 dt.February 17, 2011, of AIBOA states ......

    SBI is IBA
    Are we to declare UFBU is waylaid?
    Let us ponder over?"

    -The point is were the retirees victims of inter Union rivalary?. Let AIBOC use its good offices to get Gratuity benefit to officers retired between 1.11.2007 to 23.05.2010.

  14. Non pension optees who retired between 01.11.2007 to 23.05.2010, and opted for pension subsequently lost money two ways. .1.Refund of higher amounts to Banks for late pension option 2.Had the unions demanded for effective date of increased Gratuity Ceiling as 1.11.2007 in the 9th BPS, as one time measure, they would have received higher gratuity compensation. What led to the error? Why Unions were silent on the shameful episode?. What is scandalous is their total silence on the issue when they met IBA Chairman on pending issues recently.

  15. The latest budget has proposed to lower the qualifying age of a senior citizen from 65 to 60. Simultaneously, the exemption limit for senior citizens is increased from Rs.2.40 lakh to Rs.2.50 lakh. A new category of senior citizens (80 and above ) has been announced. On the face of it, these measures promise much but in practice they will deliver little. But are these sufficient to ameliorate the lot of the senior citizens, who as the Finance Minister rightly says, deserve our special attention?. Tax exemptions on higher income are fine but quite obviously they are relevant only to those having matching income. It would be wonderful if a vast majority of senior citizens has taxable income beyond exempted limit. The retirement age in India varies from 58 to 60 in government and private sectors. Pension benefits wherever available will not offset the steep fall in incomes post-retirement . Many benefits that went with their jobs, notably medical benefits, are automatically scaled down or withdrawn. But it is precisely in the advancing years that health care costs will go up. The chance of a major illness impoverishing even a reasonably well off pensioner is real. The sad fact is that many of the today’s senior citizens did not have means and the wherewithal to plan for their retirement during their working years. While focusing on tax exemptions for senior citizens, we may humbly request The Hon’ble Prime Minister of India, The Hon’ble Finance Minister of India, The Hon’ble Labour Minister of India, Hon M.Ps, who are well known for justice to all concerned, to consider the genuine demand of the PSU retirees from 1.1.2006 to 23.5.2010 and amend the date of implementation of Increase of Gratuity Ceiling of Rs.10 lakh, effective from 01-01- 2006 instead of 24th May, 2010. This will really help the few senior citizens who have retired since 2006.

  16. Retired people are desperatly waiting for some good news /Action
    Taken Report on the subject mattter. Equating/Clubbing, Public Sector
    employees with Private Sector is dubious. At a time when the Govt want
    to Privatise Public Sector in the name of Public Private Partnership,
    this is only a trick played to deny benefit to the then existing Public sector
    employees at that time. Let the interests of the retired PSU employees be protected
    first. Elections are round the corner. Do we
    require another ANNA to do this. Satyagraha has the stength to shame the powerful.
    @ @ @

    The Payment of Gratuity (Amendment) Act, 2010, which was passed by
    Parliament in its last session, has raised the hackles of various
    trade unions.

    The Act has raised the maximum limit of gratuity payable to an
    employee from Rs 3.5 lakh to Rs 10 lakh. Then why are the trade unions
    angry? It is the date of implementation of the Act, which has annoyed
    workers engaged in the private sector, public sector undertakings and
    the banking sectors, among others.

    The upper limit of the gratuity for government employees was raised to
    Rs 10 lakh with effect from January 1, 2006, when the recommendations
    of the Sixth Pay Commission came into effect.

    Immediately after that various trade unions demanded that a similar
    provision should be made for the employees of the private sector and
    public sector undertakings.

    Conceding the demand, the government introduced the Payment of
    Gratuity (Amendment) Bill in Parliament. While passing the Bill,
    Parliament said the Act would come into force on such date “as the
    Central Government may, by notification in the official gazette

    The Act received the assent of the President on May 17 last and the
    Union Ministry of Labour and Employment notified it on May 24, stating
    that the Act would become effective from that day.

    The trade unions say the notification is discriminatory. While for the
    government employees the maximum limit of gratuity has been revised
    with effect from January 1, 2006, for those of the private sector and
    the public sector undertakings it would be from May 24. Thus, the
    employees of these sectors, who retired between January 1, 2006 and
    May 24, 2010, would be sufferers.

    SR Khatri, general secretary of the State Bank of India Employees
    Organisation, said the government had yielded to the pressure of
    various organisations of private employers, who did not want to pay
    enhanced gratuity to their employees retiring before May 24. He said
    the trade unions would agitate against this discrimination.

    TN Goel, president of the State Bank of Indian Officers Federation,
    said it was highly unfair to the employees of the public sector banks,
    whose pay was revised with effect from November 2007. The notification
    should have taken care of this fact.

  17. Govt increased Petrol Prices 9 times in a span of 11 months as on date. But Govt not willing to back date increase in Gratuity Ceiling to 1.11.2007to benefit few employees retired in the last two years. Lack of efforts are quite apparent.

  18. Civil society activists have an important role to play in a democracy by taking up critical issues that are ignored by the political class either by default or by design. Let the issue be referred to eminent social activists.

  19. We appeal to AIBEA/AIBOC to include PRE DATING OF REVISED GRATUITY IMPLEMENTATION FROM 24/05/2010 TO 01/01/2006 also in the agenda for the proposed strike on 07/07/2011.The pensioners of this block are only a few thousands and many banks have made provisions already.You will understand that a great injustice has been done to the bank employees in this regard.Bank employees are not in anyway inferior or second to GOVT.employees and they should be treated accordingly.Please take up the matter suitably.

  20. Inflationary conditions out of my control: PM ?
    What for Unions and Retd employees are waiting for on Gratuity issue?.

  21. As a last resort pensioners of the 01/01/2006 to 24/05/2010 block / their representative Associations may make a personal representation to Prime Minister Shri.Manmohan Singh, as was done by News paper Employees, on the issue of implementation of their Wage Board recommendations recently.

  22. Any body has latest update......I understand there is some positive development through judiciary intervention.

  23. Retired Bankers are aware that the Parliament has recently( May 2010) passed the Bill for amendment to the Payment of Gratuity Act, 1972 enhancing the ceiling on Gratuity payable from Rs. 3.50 lakhs to Rs. 10.00 lakhs. The amendment has since been notified by the Government in the Gazette.

    In terms of the Government Notification, the above amendment will be effective from 24th May, 2010.

    Accordingly, all the employees and officers who retired from the Banks from 24-5-2010 are paid Gratuity either under the Gratuity Act ( with Max. of Rs. 10 lakhs ) or under our BPS/OSR ( without any ceiling ) whichever is higher.

    A copy of the Government Gazette Notification is enclosed herein for the information.


    Payable on
    i. Retirement on superannuation
    ii. Resignation after 5 years of service
    iii. Death
    iv. Disablement
    Amount 15 days wage x number of years of service
    With maximum of Rs.10 Lakhs ( w.e.f. 24-5-2010 )

    Basic Pay + DA + Special Pay + PQP + FPP + Officiating Pay

    One day wage Monthly wage divided by 26

    Example: (Retirement on or after 24-5-2010 )

     A Special Assistant, Graduate/CAIIB retiring at maximum of scales with 7 stagnation increment and after 40 years service:

    As per 9th Bipartite Settlement:
    Pay Rs. 28,110/-
    Gratuity Rs. 28,110 x 20 = Rs. 5,62,200/-

    As per Gratuity Act:
    Wage Rs. 38,925/-
    One day wage Rs. 1,497/-
    Gratuity Rs. 1,497 x 15 x 40 = Rs. 8,98,200/-

    This example indicates the loss incurred by retirees from 1.11.2007 to 23.05.2010.Unions should demand implementation of increased gratuity ceiling or seek modification of calculation under BPS(Bipartite Settlement or Officers Service Regulations) from 01.11.2007 so that the anomoly is removed as one time measure from 1.11.2007, in the 9th BPS.

  24. October 1st is observed as International Senior Citizens day. We see lot
    of interesting bill boards regarding Senior Citizens every where and everyday, in
    India. Even in annual budgets of Finance Minister, senior citizens
    will figure. But on enhanced Gratuity Revision, Govt /Unions/Associations/ members, have forgotten about their well being after retirement. Public memory is short.
    Afterall life a is a small journey from womb to the tomb.

  25. We are at end of 2011. It appears that No Achievement is in the hands of Unions, now days. Divide and rule is the policy of rulers. Why the Bank Unions do not make a fresh demand for revised gratuity from at lease 1.11.2007 to banking industry is not known?. Discrimination among 9 BPS members also?. A slap by Unions on the face of retired members.

  26. "Enhanced Gratuity : Can Central Government Pick Out A Date From Hat" - Part 1 : N Pradeep Kumar, Advocate, Supreme Court tears into government's arbitrariness in his article dt.28.03.2012.It appears that the root cause of this sad truth lies in the working our democratic politics, which converts people with rough mentality and background into leaders. Our democracy thrives on quanity rather than quality.

  27. Recently N.Pradeep Kumar part II article on arbitariness in selection of implementation date on "Enhanced Gratuity" appeared in ALL BANKING Solutions for few days and later withdrawn?.“Life's tragedy is that we get old too soon and wise too late” - by Benjamin Franklin.