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The second amendment made by the Payment of Gratuity Second Amendment Act, 1. Act. This amendment came into force from 1. The third amendment made by the Payment of Gratuity Amendment Act, 1. Rs. 1,6. 00 to Rs. Rs. 3,5. 00 p. m. Rs. 5. 0,0. 00 c making it obligatory for the employers to pay simple interest at a specified rate if the gratuity is not paid within 3. Compulsory insurancesetting of gratuity fund for payment of gratuity. The amendments at a to c above were brought into force w. The amendment at d has not been brought into force so far. In fact, this particular provision is being reviewed in view of certain subsequent developments. The rate of simple interest mentioned at c above has been fixed at 1. The fourth amendment made by the Payment of Gratuity Amendment Act, 1. Doing away with the wage ceiling altogether for coverage under the Payment of Gratuity Act, 1. Enhancing the ceiling of the maximum amount of gratuity from Rs. Rs. one lakh. This amendment came into force w. The Fifth Amendment made by the Payment of Gratuity Amendment Act, 1. Rs. one lakh to Rs. Background of the present amendments. Before the enactment of the Payment of Gratuity Act, 1. State Laws providing for payment of gratuity. These were the Kerala Industrial Employees Payment of Gratuity Act, 1. West Bengal Employees Payment of Gratuity Act, 1. The question of having a Central Legislation on the subject was discussed in the Labour Ministers Conference held in New Delhi on 2. August, 1. 97. 1 as also the Indian Labour Conference held on 2. October 1. 97. 1 and general consensus was reached for enacting a Central Legislation on payment of gratuity. Accordingly, a Central Law modeled largely on the pattern of West Bengal Employees Payment of Gratuity Act, 1. Payment of Gratuity Act, 1. It was brought into force with effect from the 1. S. O. No. 6. 01 E dated 1. India. The Act has been recently extended to the State of Sikkim w. The Act provides for payment of gratuity to employees employed in any factory, mine, oilfield, plantation, port, Railway Company and in any shop or establishment employing ten or more workers. It has also been extended to motor transport undertakings employing ten or more workers. Under the Act, gratuity is payable at the rate of fifteen days wages for every completed year of service or part thereof in excess of six months subject to a monetary ceiling of Rs. In case of employees employed in seasonal establishments, gratuity is payable at the rate of seven days wages. A worker is entitled to gratuity in the contingency of superannuation, retirement, resignation, death or disablement due to accident or disease, subject to completion of five years continuous service. The condition of five years is however, not applicable in case of death or disablement. Further, it does not make any discrimination between casual, contract, temporary and permanent worker who has completed the prescribed period of five years continuous service as defined in section 2. A ofthe Act. The liability for payment of gratuity vests in the employer. Gratuity is payable in addition to pension or contributory provident fund, if any. The Payment of Gratuity Act, 1. Therefore, the schools under the control of local bodies were covered under the Act with effect from 8. However, the employees of other educational institutions were facing denial of gratuity as they were not covered under the Act. The employees of the Government schools are already entitled to gratuity under the extant rules of the Government governing gratuity and pension but the employees of the private schools were having no legal entitlement to gratuity. As gratuity is an old age retiral social security benefit, it was considered desirable to extend the benefit of the Payment of Gratuity Act, 1. Accordingly, the Central Government extended the provisions of Payment of Gratuity Act, 1. Ministry of Labour and Employment Notification No. S. O. 1. 08. 0 dated 3 April 1. The Notification came into force w. Gazette of India. In an appeal filed before the Supreme Court in the case of Ahmedabad Private Primary Teachers Association v. Administrative Officer and others, AIR 2. SC 1. 42. 6, the Apex Court in its judgment dated 1. Gratuity Act, 1. 97. Payment of Gratuity Act, 1. The ruling also, inter alia, states that non use of wide language similar to definition of employee as is contained in section 2f of the Employees Provident Funds and Miscellaneous Provisions Act, 1. The observations of the Supreme Court are as follows Our conclusion should not be misunderstood that teachers although engaged in very noble profession of educating our young generation should not be given any gratuity benefit. There are already in several States separate statutes, rules and regulations granting gratuity benefits to teachers in educational institutions which are more or less beneficial than the gratuity benefits provided under the Act. It is for the Legislature to take cognizance of situation of such teachers in various establishments where gratuity benefits are not available and think of a separate legislation for them in this regard. That is the subject matter solely of the Legislature to consider and decide. Keeping in view the observations of the Supreme Court as mentioned above the definition of employee under section 2e in the existing Act has been proposed to be widened in keeping with the spirit of the Act. Vista Vs Ritz Diesel Comparison. Existing Definition of employee under Section 2 e of the Payment of Gratuity Act, 1. Section 2 e employee means any person other than an apprentice employed on wages in any establishment, factory, mine, oilfield, plantation, port, railway company or shop, to do any skilled, semi skilled, or unskilled, manual, supervisory, technical or clerical work, whether the terms of such employment are express or implied, and whether or not such person is employed in a managerial or administrative capacity, but does not include any such person who holds a post under the Central Government or a State Government and is governed by any other Act or by any rules providing for payment of gratuity. The amendment has retained the basic features of the definition of the term employee as given in the Payment of Gratuity Act, 1. Amended Definition. Section 2e employee means any persons other than an apprentice who is employed for wages, whether the terms of such employment are express or implied, in any kind of work, manual or otherwise, in or in connection with the work of a factory, mine, oilfield, plantation, port, railway company, shop or other establishment to which this Act applies, but does not include any such person who holds a post under the Central Government or a State Government and is governed by any other Act or by any rules providing for payment of gratuity. The Government has made the amendment with retrospective effect from April 3, 1. The Government has also introduced Payment of Gratuity Amendment Bill, 2.