#gratuity ceiling

The Madhya Pradesh High Court has ruled that an employee’s period treated as 'dies non' - where no wages are due but service is uninterrupted - must still be counted toward qualifying service under the Payment of Gratuity Act. This ensures that reinstated employees are not penalized for administrative delays or procedural technicalities, safeguarding their statutory right to full gratuity based on cumulative tenure.

Employers must recalculate gratuity arrears for employees whose service ended after 29 March 2018 under the enhanced Rs.20 lakh ceiling, with 6% interest from the due date. The ruling clarifies the retroactive effect of the 2018 amendment, impacting pending and future gratuity claims.

Kerala High Court holds that employees of instrumentalities of state are entitled to gratuity under the Payment of Gratuity Act, 1972, even if employer rules prescribe lower ceilings.