payment of gratuity -central/state govt.employees discriminated

Tilak Marg Forum for Legal Questions Forums Service and Labour Laws payment of gratuity -central/state govt.employees discriminated

This topic contains 2 replies, has 2 voices, and was last updated by  vijayan valiyapurayil 4 months, 2 weeks ago.

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  • #4645

    According to “payment of Gratuity Act 1972′ gratuity calculation formula for permanent employees is (pay+DA)x No.of years of service x 15/26(sec.4(2). Further the act says that any establishment can be exempted from the purview of the act by the govt,if employees are in receipt of ‘not less favourable’ than the benefits conferred under the act(sec.5.2.
    sec.2(e) says that central/state govt.employees governed by any other act or by any rules providing for payment of gratuity is not ’employee’under the payment of gratuity act.
    The gratuity payment formula adopted by central/state govts is (pay+DA)x No.of years of service x 15/30.This multiplication factor of 15/30 contrary to 15/26 of gratuity act , results in heavy loss of amount to central/state govt.employee during retirement.A govt.employee with a basic pay of Rs.60000/-will lose about Rs.1.5lac-2 lacs in gratuity to a similarly placed one in private sector/public sector.Umpteen unions of govt.employees keep mum on this issue!
    Any justification for this gross discrimination shown towards central/state govt.pensioners?

  • #4681

    It is not possible for us to tell you what is the justification for unfavourable formula used by the Government for paying gratuity to government employees vis-à-vis private sector employees, etc. It is a policy decision of the Parliament / Government, which may perhaps have been taken based on various factors (including various other benefits of a government service). You may ask the Government to explain the justification for such discrimination.

    Legally speaking, reasonable classification is permissible under Article 14 of the Constitution which guarantees right to equality.

    However, if you feel aggrieved, you can try challenging such discrimination in the high court by filing a writ petition, though the chances of success would be limited.


    Dr. Ashok Dhamija is a New Delhi based Supreme Court Advocate and author of law books. Read more about him by clicking here. List of his Forum Replies. List of his other articles. List of his Quora Answers.

  • #4699

    Thank you for your reply and valuable suggestions.I had sought 3 pieces of information from government(Ministry of Railways) on the issue through online RTI. When no reply received within one month,I submitted an appeal which was treated as ‘first appeal’in the online RTI. However, immediately i got reply letter by on the items I sought information.
    Item(1) was ‘Can Rlys or any other establishment give lesser benefit than what is given under the payment of gratuity act?
    Ministry of Rlys totally ignored this item.
    Item(3) was ‘in the 15/30 formula adopted in certain Rlys,30 denotes the days of the month. When days of the months are having different days ie,28/29/30/31,under which rule 30 is adopted for gratuity?
    Fortunately, Rlys quoted this item in the reply letter, but without any reply!
    When I tried ‘first appeal’ on line, the site says I exhausted my first appeal chance. Then I sent an email to ‘’ to extend facility to appeal on line on 21/2/18.But no reply and no action.
    Can you please suggest how to proceed further as Rlys is reluctant to give proper and complete reply?

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