My father was a doctor at a charitable trust hospital. After retirement, the trustee did not pay gratuity or PF, stating that we did not deduct any PF from the salary. We need advice on this matter from the labor ministry.
From India, Ahmedabad
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From India, Ahmedabad
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Hi Priyam,
You'll get to see necessary clarifications in this link - https://www.citehr.com/461953-charit...on-labour.html; https://indiankanoon.org/doc/1267183/ https://boardhr.blogspot.com/2019/10...ble-trust.html. However, we need to look at the provisions relevant to these as per the newly passed bills - Labour Codes already circulated in the official Gazette of the GoI, which have received the approval of the President of India. Implementation notification is awaited at any time now.
From India, Bangalore
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1272You'll get to see necessary clarifications in this link - https://www.citehr.com/461953-charit...on-labour.html; https://indiankanoon.org/doc/1267183/ https://boardhr.blogspot.com/2019/10...ble-trust.html. However, we need to look at the provisions relevant to these as per the newly passed bills - Labour Codes already circulated in the official Gazette of the GoI, which have received the approval of the President of India. Implementation notification is awaited at any time now.
From India, Bangalore
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Also sir,my father was a class 1 medical officer in that charitable trust hospital,but they paid 30000 as last Basic salary and other they stated it as incentive,and with that last drawn salary became 1,40k so will we get the graduity according 30k Basic salary¿
From India, Ahmedabad
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From India, Ahmedabad
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Dear Anamik Friend,
As regards to PF: Your father seems to be an exempted employee under the meaning of the EPF Act. His salary was above the threshold, and therefore, it was not mandatory to deduct any PF from your father's salary. As a result, no PF was deducted, and hence your father is not entitled to any PF benefits.
As regards to Gratuity: The Gratuity Act of 1972 is not applicable to public and charitable trusts. Therefore, your father is not entitled to any gratuity payment.
I hope you now have a clear understanding of the matter without any link to the issue.
From India, Mumbai
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As regards to PF: Your father seems to be an exempted employee under the meaning of the EPF Act. His salary was above the threshold, and therefore, it was not mandatory to deduct any PF from your father's salary. As a result, no PF was deducted, and hence your father is not entitled to any PF benefits.
As regards to Gratuity: The Gratuity Act of 1972 is not applicable to public and charitable trusts. Therefore, your father is not entitled to any gratuity payment.
I hope you now have a clear understanding of the matter without any link to the issue.
From India, Mumbai
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I don't know how you can exempt a charitable institution from the purview of any labor law. As Mr. Kumar has pointed out, the matter was discussed at length earlier, and you may please go to the link provided https://www.citehr.com/461953-charit...on-labour.html.
If charitable institutions were to be excluded from PF, Gratuity, etc., you cannot find any institution meant for profit; everyone will be running their establishment for charity. Can you say that a hospital runs without collecting fees? What is the basis of paying a doctor an "incentive"? If the hospital was running it for charity, they should have paid the doctor a fee without fixing a monthly salary or incentive. The incentive part is very serious. An incentive is a variable amount that you get based on production, service, or under certain parameters. A charitable hospital cannot offer it because by offering an incentive, the management is motivating the employee to do more work or put in more labor. This shows that a master-servant relationship existed, and as such, the laws relating to servants should be applicable to the latter.
It's okay that since the salary exceeded Rs 15,000, he was excluded from PF. But he cannot be denied gratuity if he has served for five years. The gratuity will be based on the salary part without considering the variables, like the incentive.
From India, Kannur
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If charitable institutions were to be excluded from PF, Gratuity, etc., you cannot find any institution meant for profit; everyone will be running their establishment for charity. Can you say that a hospital runs without collecting fees? What is the basis of paying a doctor an "incentive"? If the hospital was running it for charity, they should have paid the doctor a fee without fixing a monthly salary or incentive. The incentive part is very serious. An incentive is a variable amount that you get based on production, service, or under certain parameters. A charitable hospital cannot offer it because by offering an incentive, the management is motivating the employee to do more work or put in more labor. This shows that a master-servant relationship existed, and as such, the laws relating to servants should be applicable to the latter.
It's okay that since the salary exceeded Rs 15,000, he was excluded from PF. But he cannot be denied gratuity if he has served for five years. The gratuity will be based on the salary part without considering the variables, like the incentive.
From India, Kannur
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Dear Queriest,
A doubt arises about the remuneration paid to doctors who are carrying out their duties in consultancy, procedures, surgeries, progress reviews, emergency advice, administrative tasks, etc. They are compensated through various methods - wages/salary, fees, retainership, consultancy, per diem, per case, per visit, and more. Some may receive honorariums, incentives, or other forms of compensation, and may even be paid on an hourly basis. Regardless of the name used, these professionals, not only in the medical field but also in other industries, receive some form of 'remuneration' which might not always be referred to as 'wages or salary'. The frequency of payments can also vary, based on the level of skill involved. As long as payment is made in exchange for services rendered, other factors are not critical. Whether the organization is charitable or not, gratuity is not merely a gesture of affection but a benefit earned for the duration of service. Hence, once the condition of 5 years of continuous service is met, the obligation to provide gratuity arises and becomes due.
In this context, there are numerous court cases available online. An example is a judgment passed by the Gujarat High Court, which is attached and can shed more light on the subject.
From India, Bangalore
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A doubt arises about the remuneration paid to doctors who are carrying out their duties in consultancy, procedures, surgeries, progress reviews, emergency advice, administrative tasks, etc. They are compensated through various methods - wages/salary, fees, retainership, consultancy, per diem, per case, per visit, and more. Some may receive honorariums, incentives, or other forms of compensation, and may even be paid on an hourly basis. Regardless of the name used, these professionals, not only in the medical field but also in other industries, receive some form of 'remuneration' which might not always be referred to as 'wages or salary'. The frequency of payments can also vary, based on the level of skill involved. As long as payment is made in exchange for services rendered, other factors are not critical. Whether the organization is charitable or not, gratuity is not merely a gesture of affection but a benefit earned for the duration of service. Hence, once the condition of 5 years of continuous service is met, the obligation to provide gratuity arises and becomes due.
In this context, there are numerous court cases available online. An example is a judgment passed by the Gujarat High Court, which is attached and can shed more light on the subject.
From India, Bangalore
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Yes, if his incentive is part of a service contract, then it should be included in the wages/salary for deciding the amount of gratuity.
There are a lot of systems of remuneration payment. By whatever name called, if the same is remuneration for the work done, it shall come under the heading wages. Please refer to an Income Tax case (attached) wherein the hospital was deducting the TDS from the doctors as if they were paid consultancy/professional charges. But the doctors were governed by the service conditions of the hospital which included fixed working time, reporting at a certain time, and leaving the hospital at a certain time, prohibition of practicing or consulting outside the hospital or private practicing, etc. The IT observed that if these doctors were consultants, they should not be following the general HR policies of the hospital and there should not be restrictive clauses regarding the engagement of other business or profits.
In this case, the incentives shall also form part of remuneration which qualifies for Gratuity provided the incentive is based on the number of cases attended. It will have all the characteristics of a piece-rate wage.
From India, Kannur
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There are a lot of systems of remuneration payment. By whatever name called, if the same is remuneration for the work done, it shall come under the heading wages. Please refer to an Income Tax case (attached) wherein the hospital was deducting the TDS from the doctors as if they were paid consultancy/professional charges. But the doctors were governed by the service conditions of the hospital which included fixed working time, reporting at a certain time, and leaving the hospital at a certain time, prohibition of practicing or consulting outside the hospital or private practicing, etc. The IT observed that if these doctors were consultants, they should not be following the general HR policies of the hospital and there should not be restrictive clauses regarding the engagement of other business or profits.
In this case, the incentives shall also form part of remuneration which qualifies for Gratuity provided the incentive is based on the number of cases attended. It will have all the characteristics of a piece-rate wage.
From India, Kannur
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Respected Madhu ji and other members,
I am extremely sorry for stating that the Gratuity Act 1972 is not applicable to public and charitable trusts, and thank you for correcting me in a timely manner.
I don't know what prompted me to respond to this query in the morning when my schedule is quite busy. I was glancing at various posts and came across this one with several links in the reply, which led me to respond hastily.
Dear Anamik Friend,
I stand corrected. Your father is entitled to Gratuity if he has completed 5 years of service.
From India, Mumbai
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I am extremely sorry for stating that the Gratuity Act 1972 is not applicable to public and charitable trusts, and thank you for correcting me in a timely manner.
I don't know what prompted me to respond to this query in the morning when my schedule is quite busy. I was glancing at various posts and came across this one with several links in the reply, which led me to respond hastily.
Dear Anamik Friend,
I stand corrected. Your father is entitled to Gratuity if he has completed 5 years of service.
From India, Mumbai
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No issue, Mr. Akhil. It happens during our busy schedules, and it is good that others in the forum could point it out and correct it. That is the spirit of citehr.com, which is present only in this group. Perhaps that is why I keep spending time on this site.
From India, Kannur
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From India, Kannur
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