8th Pay Commission: Luck of central employees shines! Will gratuity of ₹75 lakh be given directly instead of ₹25 lakh?

New Delhi: A very big and important news is coming for lakhs of central employees and pensioners of the country. Just before the formation of the 8th Pay Commission and implementation of its recommendations, many big government employees organizations and pensioners associations have raised a strong demand for radical changes in the existing gratuity rules. According to media reports, if these demands of the employees are accepted, then there may be a historic increase in the amount of money received after retirement. These major demands include increasing the maximum limit of gratuity, changing the method of its calculation and significantly increasing the financial benefits received by the family in case of death of an employee while on the job.

What are the current rules of gratuity?

As per the current rules, Central Government employees are given the benefit of gratuity on retirement after completing at least 5 years of regular service. Apart from this, if unfortunately an employee dies while on the job, his family is paid death gratuity as per the rules set by the government.

In the current system, retirement-cum-death gratuity is calculated in such a way that for every 6 months of service period, one-fourth (1/4) of the employee’s (Basic Pay + Dearness Allowance i.e. DA) is given. At present the rule is that the total gratuity amount cannot exceed a maximum of 16.5 times the employee’s last salary (Basic Pay + DA) and its maximum limit has been locked at Rs 25 lakh.

Railway Technical Supervisors Association (IRSTA) made this big proposal

First among the employee organizations, ‘Indian Railway Technical Supervisors Association’ (IRSTA) has submitted its detailed proposal and memorandum to the government. The union demands that the current maximum limit of gratuity should be directly increased from Rs 25 lakh to Rs 50 lakh. Along with this, he has also suggested a new formula for calculation.

Under the new formula: Gratuity = (1/3) x (Basic Pay + Dearness Allowance) × (Total number of half yearly services completed by the employee). The organization says that retirement gratuity should be calculated at the rate of one-third of the monthly salary and DA received on the day of retirement for every six-month period. If an employee has completed 33 years or more of mandatory service, the total gratuity he receives should be 32 times his last monthly salary and DA, subject to a maximum of Rs 50 lakh.

New slab for death gratuity on death

The Railway Technical Supervisors Association has also advocated major changes in the rules of death gratuity to protect the families of employees who lose their lives while on the job. He says that the death gratuity benefit of up to Rs 50 lakh should be given as per the slab given below based on the total service period of the employee:

• Job less than 1 year: Payment of 4 times the basic salary.
• Employment for more than 1 year but less than 5 years: Payment of 12 times the basic salary.
• Employment for more than 5 years but less than 11 years: Payment of 24 times the basic salary.
• Employment for more than 11 years but less than 20 years: Payment of 30 times the basic salary.
• Job for 20 years or more: Half of the remuneration for every completed 6 months of eligible service, subject to a maximum of 50 times the remuneration.

Separate demand of Railway Senior Citizen Welfare Committee (RSCWS)

In this series, another big organization ‘Railway Senior Citizens Welfare Society’ (RSCWS) has also sent a memorandum to the government. This committee has demanded that in view of the rising inflation figures in the country, the maximum limit of gratuity should be reviewed regularly from time to time so that its value does not reduce.

The committee also said that whenever an employee retires, the entire gratuity amount should be transferred to his account immediately on the day of his retirement without any paper delay. Along with this, he has demanded to make the rules of gratuity available under the Old Pension Scheme (OPS), New Pension Scheme (NPS) and the recently introduced Integrated Pension Scheme (UPS) more rational and transparent.

National Council-JCM asked for huge gratuity of ₹75 lakh

The biggest and shocking proposal among all has come from the ‘National Council-Joint Consultative Machinery’ (NC-JCM). This organization is presenting the side of the employees before the Central Government under the 8th Pay Commission. NC-JCM has raised the demand that the maximum limit of gratuity should be directly increased to Rs 75 lakh.

Apart from this, the organization has also demanded to change the basis of calculation of gratuity. He says that while withdrawing gratuity, the calculation should be done on the basis of only 25 working days of the month instead of 30 days. NC-JCM (employee side) has also strongly demanded that the existing maximum limit of 16.5 times the salary should be completely abolished. They argue that this 16.5 times limit causes a huge disservice to loyal employees who give the department more than 33 years of service. Now it remains to be seen what decision the government takes on these demands placed before the 8th Pay Commission.