 bill no 86 of  2009 the payment of gratuity (amendment) bill, 2009 byadv  pt thomas, mp a billfurther to amend the payment of gratuity act, 1972be it enacted by parliament in the sixtieth year of the republic of india as follows:—1  (1) this act may be called the payment of gratuity (amendment) act, 2009short title and commencement5(2) it shall  come into force on such date, as the central government may, by notification in the official gazette, appoint2  in section 4 of the payment of gratuity act, 1972,—39 of 1972amendment of section 4(i) in sub-section (1),—(a) for the words "five years", the words "three years" shall be substituted;(b) in the first proviso, for the words "five years", the words "three years"shall be substituted;(ii) in sub-section (2),—(a) for the words "fifteen days", the words "thirty days" shall be substituted;(b) the explanation shall be omitted statement of objects and reasonsthe payment of gratuity act, 1972 provides for payment of gratuity to employees engaged in factories, mines, oilfields, plantations, ports, railway companies, shops or other establishments and for matters connected therewith or incidental theretosection 4 of the said act inter alia provides that the gratuity shall be payable to an employee who has rendered continuous service for not less than five years on his superannuation or retirement or resignation the completion of continuous service of five years shall not be necessary where the termination of the employment of any employee is due to death or disablement in view of the present economic scenario in our country, an employee has the opportunity to switch over to other job for getting more monetary and other benefits rather than to stay in any particular job for five years employees are also sometimes unable to continue in their jobs for five years in an industry due to impact of global recession so, reducing the duration of continuous service from five years to three years for grant of gratuity shall benefit the employees covered by the said actat present, the amount of gratuity for every completed year of service is at the rate of fifteen days' wages based on the rate of wages last drawn by an employee employees shall get more amount for their welfare and to meet their future liabilities, if the calculation of gratuity amount is increased to thirty days' wages from the present fifteen days' wages for every completed year of servicethe bill seeks to achieve the above objectives financial memorandumclause 2 of the bill provides that the gratuity shall be payable to an employee on the termination of his employment after he has rendered continuous service for not less than three years and that the amount of gratuity payable to an employee for every completed year of service shall be at the rate of thirty days' wages based on the rate of wages last drawn by the employeethe bill, therefore, if enacted, will involve expenditure from the consolidated fund of india in respect of establishments aided by or under the control of central government it is likely to involve an annual recurring expenditure of rupees 10 crore from the consolidated fund of indiano non-recurring expenditure is likely to be involved annexure extract from the payment of gratuity act, 1972(act no 39 of 1972)     payment of gratuity4 (1) gratuity shall be payable to an employee on the termination of his employment after he has rendered service for not less than five years,—(a) on his superannuation, or (b) on his retirement or resignation, or (c) on his death or disablement due to accident or disease:provided that the completion of continuous service of five years shall not be necessary where the termination of the employment of any employee is due to death or disablement:     (2) for every completed year of service or part thereof in excess of six months, the employer shall pay gratuity to an employee at the rate of fifteen days' wages based on the rate of wages last drawn by the employee concerned:     explanation— in the case of a monthly rated employee, the fifteen days' wages shall be calculated by dividing the monthly rate of wages last drawn by him by twenty-six and multiplying the quotient by fifteen      lok sabha———— a billfurther to amend the payment of gratuity act, 1972————(adv pt thomas, mp)gmgipmrnd—3942ls(s5)—05-11-2009