Gratuity is a one of the retirement benefits for long service. Before May 1972, the payment of gratuity by employer was on voluntary basis, after that it was incorporated in Standing Orders and becomes a statutory obligation of employers. Since then payment of gratuity is a legal benefit of eligible worker.
There are three different retirement benefits defined in Standing Order 12(6) i.e. “Gratuity” or “Provident Fund” or “Approved Pension Fund”. The commercial establishment employed 20 or more workmen OR any industrial establishment employed 49 or more workmen, directly or indirectly, during any days of preceding 12-months, are legally liable to offer at least any one of these retirement benefit.
S.O 12(6) of W.P. Industrial & Commercial (Standing Orders) Ordinance, 1968 defines, “where a workman resigns from service or services are terminated by the employer, for any reason other than misconduct, shall be entitled for gratuity equivalent to thirty (30) days wages, calculated on the basis of the (wages admissible to him in the last month of service if he is a fixed-rated workman or the highest pay drawn by him during the last twelve months if he is a piece-rated workman), for every completed year of service or any part thereof in excess of six months: provided that, where the employer has established a provident fund to which the workman is a contributor and the contribution of the employer to which is not less than the contribution made by the workman, no such gratuity shall be payable for the period during which such provident fund has been in existence. Provided further that if through collective bargaining the employer offers and contributes to an “Approved Pension Fund” as defined in the Income Tax Ordinance, 2001, and where the contribution of the employer is not less than fifty per cent of the limit prescribed in the aforesaid Ordinance, and to which the workman is also a contributor for the remaining fifty per cent or less, no gratuity shall be payable for the period during which such contributions has been made.]”
Which Establishment is Liable to Pay Gratuity?
As per Section 1 of the Ordinance, the provision of gratuity becomes applicable to: every commercial establishment employing or employed twenty or more workmen and every industrial establishment employing or employed fifty or more workmen, on any day during the preceding twelve month.
When Gratuity becomes payable?
Gratuity becomes payable at time of separation from services which could be: (i) by resignation by the workman, (ii) termination of services by employer due any reason other than misconduct (in case of proved misconduct employer is not bound to pay gratuity), (iii) in case of death and (iv) retirement or superannuation of a worker.
Who is entitled for Gratuity?
There are following conditions to check the entitlement of gratuity:
(i) provision of statutory gratuity is applicable on the establishment i.e. industrial or commercial, in respect to number of workmen employed, as explained above.
(ii) employee is a "workman" as defined in Section 2(i) of this Ordinance as someone who is employed to do any skilled or unskilled, manual or clerical work. According to various Courts judgments, it is the nature of duties he is performing rather than his designation or wages which determine whether he is a "workman" or not.
(iii) length of service should be excess to six months or more.
Rate of Gratuity
Earlier the rate of gratuity was 15-days of wages for each completed year of service and later on it was revised as 20-days wages. Right now the present rate of gratuity is 30-days wages for every completed year of service or for any period in excess of six month in the same establishment.
How to calculate the amount of Gratuity payable?
Following is procedure to calculate the payable gratuity of an eligible worker:
The 26-days month is defined in the Explanation of Section 3 of the Minimum Wages for Unskilled Workers Ordinance, 1969 i.e. "month" means a normal working period of twenty-six days calculated at the rate of forty-eight hours of work per week. Similarly the minimum wages for skilled and semi-skilled workers is also based on 26 days in a month. The yearly provincial gazettes specify the same for these categories of workers.
Meaning of Wages for Calculation of Gratuity
All payments or allowances which are regular, permanent and non-contingent in nature, no matter by what name they are called, are included in wages for the purpose of gratuity. Any payments which are irregular (unpredictable and/or depend on the goodwill of employer) or contingent in nature (payable upon existence or disappearance of certain conditions (e.g., profit) which could not be predicted in advance) then those payments are not part of wages for the purpose of calculating gratuity.
In the case of fixed-rated worker, gratuity is to be calculated on the basis of wages admissible to worker in the last month of service.
In the case of piece-rated worker, gratuity is to be calculated on the basis of highest pay drawn during the last twelve months, for every completed year of service or any part thereof in excess of six months.
Payment of Gratuity in case of Death of Worker
In case of death of a workman, gratuity is payable to the legal dependents of a workman. As mentioned above, death may not necessarily occur on duty but the worker should be in continuous service at that time. The amount of gratuity, in this case, is transferred to "Workmen Compensation Commissioner" who will then allocate this amount to the dependents of a worker. The dependents of a deceased worker include "his widowed mother, his own widow, minor son and unmarried daughter". The Commissioner shall proceed with the allocation of the deposit amount to the dependents of the deceased in accordance with the provisions of Section 8 of the Workmen’s Compensation Act, 1923. If the employer fails to deposit the gratuity amount then the dependents of the deceased may submit an application to Commissioner for the recovery.
Important points to be remembered regarding payment of gratuity:
What is e-marking?
E-marking, also known as onscreen marking or digital marking, is the use of digital technology in the education or accreditation sector specifically designed for marking or grading an exam or assessment.
E-marking applications allow markers to mark exam responses which have been scanned and uploaded as digital images, or online assessment responses on a computer screen, rather than on paper. It is the opposite of traditional ‘pen and paper’ marking, and can be executed via a local application, or via a browser-based application delivered over the Internet.
There are no restrictions on the types of tests that can be marked using e-marking. E-marking is widely applied amongst high stakes examinations throughout the world, with two thirds of marking completed in this way in the UK. It is also used to assess other types of qualifications such as exams for accountants.
Who use e-marking?
Enterprise scale e-marking applications are usually adopted by awarding bodies, which are the organisations who provide regulated qualifications in certain regions or countries. For example, Cambridge Assessment provide educational assessments for over 8 million learners in over 170 countries, marked by over 30,000 examiners every year. Cambridge Assessment have been using e-marking since 2014 to mark their assessments across the world. Government ministries also adopt e-marking for standardised national assessments.
How does e-marking works?
E-marking can be used to mark CBT (Computer-Based Tests) or exams taken with pen and paper. For pen and paper exams, the answer booklets can be scanned and the digital images uploaded to an e-marking software application. Exam answers are read and considered against an agreed mark scheme as usual, all accessed centrally through the e-marking application. Markers use the computer mouse and keyboard to award marks for each exam question. Multiple-choice exams can be either marked by examiners or can be auto-marked by the software application where appropriate. Most e-marking applications auto-tally marks for each exam, storing each student’s total score for retrieval by the awarding body.
Perceived benefit of e-marking
The benefits of e-marking vary from organisation to organisation but can include:
Difference between e-marking & onscreen marking
Absolutely nothing. The terms e-marking and onscreen marking can be used interchangeably to describe the process of human examiners viewing and marking examinations on a computer screen. Other terms also used to describe this process are digital scoring, remote scoring, online grading, online marking, electronic marking and onscreen rating.
E-marking application difficult to use?
Every e-marking application is different, but all are designed to improve the speed and efficiency of marking. Even markers who are not computer literate may be taught to use e-marking applications with the appropriate instruction. Overall, e-marking applications are generally not harder to use than most day to day computer applications.
Use of special equipment in e-making?
No. Most of the time, an Internet-enabled computer and an Internet connection is enough to run any e-marking application, many of which will run in an Internet browser. Some e-marking software may run locally on a PC, in which case the correct installation and configuration of the local e-marking application is essential. Sufficient bandwidth (around 2Mbps) is always recommended for a quality e-marking experience.
ICAP prefer e-marking?
Many markers prefer the time efficiencies introduced by e-marking, and the auto tallying features. However, there are still some markers who prefer traditional pen and paper marking.
Perceived barriers to e-marking
E-marking requires the underlying technical infrastructure to drive it and an application to access it. For some awarding bodies, migrating from an existing infrastructure or building from the ground up may be perceived as a barrier. However, many organisations find that the costs dedicated to infrastructure are over time absorbed by the efficiencies introduced by e-marking, and in many cases organisations have found the introduction of e-marking to quickly begin showing cost savings.
Early adopters of e-marking
Early adopters in the UK include Cambridge Assessment which began testing e-marking in 2004. In 2010, the International Baccalaureate began using e-marking. By 2012, 66% of nearly 16 million exam scripts were “e-marked” across the UK. The proliferation of e-marking now continues outside of the UK with awarding organisations and universities in countries including India, Hong Kong, Slovenia and many Caribbean islands using e-marking for their high-stakes examinations.
Future of e-marking
The use of e-marking is growing globally. Today, it is used to assess mainly high-stakes or ‘summative’ exams, but as the technology becomes more widely used e-marking may be used to mark other types of e-assessment and e-coursework at the ‘formative’ level in the classroom, with the introduction of media marking within some e-marking tools. E-marking providers are investing in new technologies, such as HTML5, to make e-marking more robust, more flexible and more scalable for the future.