Payment of Gratuity Act: RBE No.130/2000 – Application to Casual Labour

No.E(LL) 86/4 T/GRA/1-2, dated 30.06.2000

Sub: Payment of Gratuity Act, 1972 and the Rules framed thereunder – Application to Casual Labour on Railways.

1.     In implementation of the judgment of the Supreme Court of India, the provisions of the Payment of Gratuity Act, 1972 were made applicable to all casual labour employed on Railways vide Board’s letter No. E(LL)/85/AAT/GRA/1-1, dated 26.02.1986 (RBE No.46/1986). While instructing the Railways to take necessary steps to comply with the provisions of the Act for payment of gratuity to the casual labour, whether employed on daily or monthly rates, in the event of their demitting service due to superannuating/ retirement etc., it was indicated that further instructions for regulating payment of gratuity under the Payment of Gratuity Act in respect of such of the casual labour who continued to be in employment on their appointment against regular posts as also those who were proposed to be appointed to regular service would follow.

2.     Though the provisions of the Payment of Gratuity Act, 1972 shall continue to be applicable to the casual labour for the purpose of calculating gratuity for the period of casual labour service upto the date preceding the date of absorption, it has now been decided by the Board that such of the casual labour who continued to be in service and were/are absorbed against regular vacancies, shall be allowed to exercise an option as under:-

(i) payment of Gratuity under the provisions of the Payment of Gratuity Act, 1972 for the period of service upto the date preceding the date of absorption and for payment of gratuity and pension for the period of regular service under the provisions of the Railway Services (Pension) Rules, 1993;

OR

(ii) to payment of gratuity and pension counting half of the service rendered in temporary status and full service rendered on regular basis under the provisions of the Railway Services (Pension) Rules, 1993, besides gratuity under PG Act for the period preceding the attaining of temporary status.

3.1   In case option (i) above is exercised, the Railway servants who have since retired/ ceased to be in employment will become eligible for payment of gratuity for the period of casual labour service upto the date preceding the date of absorption under the provisions of the Payment of Gratuity Act, 1972 worked out on the basis of the wages admissible on the last date of temporary status service and for the period of delay in payment of gratuity, i.e., for the period from the date of absorption upto the end of the month preceding the date on which the payment is made, the amount of gratuity so worked out will carry an interest at the simple rate not exceeding the rate notified by the Government from time to time for repayment of long term deposits. The Railway servants who have been absorbed against regular vacancies and are still in service shall be paid gratuity forthwith calculated under the provisions of the Payment of Gratuity Act, 1972 for the period of Casual Labour service upto the date preceding the date of absorption together with interest at the simple rate as specified above for the period of delay in payment i.e. from the date it became due for payment upto the end of the month preceding the date on which the payment is made. At the time of retirement/ final cessation, the Railway Servant shall be settled under the provisions of the Railway Services (Pension) Rules for the period of service from the date of absorption upto the date of retirement/ final cessation.

3.2   In all such cases where a retired employee opts for payment of gratuity under the Payment of Gratuity Act for period upto the date of absorption, the over payments, if any, due to 50% of this period having been counted for pensionary benefits at the time of settlement, would be recovered/ adjusted along with same rate of interest as payable under Payment of Gratuity Act, 1972.

4.     In case option (ii) above is exercised, half of the period of temporary status service and full period of regular service will be taken into account for grant of pensionary benefits under the Railway Services (Pension) Rules, 1993. If the Railway Servant is eligible to draw gratuity under the provisions of the Payment of Gratuity Act, 1972, for the period of service prior to grant of temporary status, the same shall be worked out on the basis of emoluments admissible on the date preceding the date on which he was granted temporary status. The amount of gratuity thus worked out shall be paid along with the interest at the rate specified above for the period of delay i.e. from the date it became due for payment following grant of temporary status upto the end of the month preceding the date on which the payment is made.

5.     Immediately on payment of gratuity, an endorsement shall be made by the Head of Office in the service records of the concerned Casual Labour/ Railway Servant and a copy of the sanction order shall also be pasted therein.

6.     The Railways shall suo moto take steps to examine all the past cases on the basis of records available and settle the claims accordingly. For this purpose, all the claimants may be suitably addressed on the basis of particulars available with the Railways, so that the claimants or their legal heirs can claim the payment without delay. The Railway Administration shall extend all assistance to the retired as well as the serving Railway servants to exercise the option judiciously in order that the option exercised is advantageous to them. A compliance report may be sent to Board’s office by 30.9.2000, duly indicated the total number of claims received, the number of claims settled and the reasons for delay in settlement.

7.     This issues with the concurrence of the Finance Directorate of the Ministry of Railways.

Download Railway Board Circular RBE No.130/2000                                             

Forward reference ⇒ RBE No.