Gratuity payment not to be deferred till employee’s retirement: DG Codes

Jammu, Dec 15: Director General (Codes) J&K Finance department Friday directed that the gratuity payment would not be deferred till the employee's retirement.

“The previous employer will discharge its gratuity liability by paying the amount of retirement gratuity, in proportion to the service rendered with such employer, at the time of confirmation or absorption of or in service by the new employer,” Director General (DG) Codes said, while specifying the procedure to be adopted, while discharging gratuity liability of such employees, in order to streamline the process.

He was explaining modalities for discharging gratuity liability during transition of an employee under Defined Contributory Pension Scheme or New Pension Scheme (NPS) from UT government to UT autonomous body or vice versa and from one UT autonomous body to another autonomous body.

Directions were issued after it was observed that the employees after such transition (from UT government services to UT autonomous body and vice-versa or between UT autonomous body to another autonomous body) faced difficulties in timely discharge of gratuity liability from the previous employer.

In this connection, DG Codes asked the Administrative Secretaries to follow Circular instructions issued vide No FD-Code/452/2021-02-1541 dated February 16, 2023 by the Finance Department.

This circular (issued on February 16, 2023) had laid down the instructions regarding counting of previous service for the purpose of gratuity on mobility of an NPS employee from one department to another department of UT government service or from central government service to UT government services and vice-versa or from UT government services to UT autonomous body and vice versa or between UT autonomous body to another UT autonomous body.

As per this circular, on mobility from one department to another department of UT government service, the service rendered in the previous department shall be counted for the purpose of grant of gratuity.

On mobility from central government service to UT government service or vice versa, having NPS with provisions of retirement gratuity or death gratuity for its employees, the service rendered in the central government or in UT government, as the case may be, shall be counted for the purpose of grant of gratuity.

There shall be no sharing of gratuity liability between the Centre and UT government.

On mobility from UT government service to UT autonomous body having NPS with provisions of retirement or death gratuity for its employees, similar to that in UT government, the service rendered in the UT government would be counted for grant of gratuity.

“The government will discharge its gratuity liability by paying the amount of retirement gratuity for the service rendered in the government to the UT autonomous body. This procedure shall be followed mutatis mutandis in respect of NPS employees going over from one autonomous body to another autonomous body or from an autonomous body to UT government having NPS with provisions of retirement or death gratuity for its employees similar to UT government employees,” the circular had specified.

On mobility from UT government service to a UT autonomous body, where the provision for grant of gratuity similar to that in UT government does not exist or to a Public Sector Undertaking (PSU), the NPS government employees shall be granted retirement gratuity as per rules for the service rendered in the UT government subject to the condition that the total gratuity admissible in respect of the service rendered under the Government of J&K, shall not exceed the amount that would have been admissible, had the government servant continued in government service and retired on the same pay which he or she drew on retirement from later organization.

“These provisions would be applicable to government employees covered under NPS who resign (technical resignation) to take up another appointment, with proper permission, in Centre or UT government or central or UT autonomous body or a PSU,” it was clarified.