Could anyone clarify whether gratuity provisions are applicable to NGOs/non-profit organizations, particularly in terms of how they are classified legally as an ‘establishment’? Also, are there any notable court judgments that have interpreted or clarified the applicability of gratuity to NGOs?
As per Section 2(29) of SS Code, NGO is an establishment i.e. a place where any occupation is carried on unless it is also an industry. The First Schedule of SS Code regarding Applicability of SS Chapters states the following for Gratuity:
•Gratuity: every shop/establishment in which ten or more employees are employed, or were employed, on any day of the preceding twelve months
Therefore, since the definition of Establishment is clear and uniform now under Labour Codes, gratuity is applicable to an NGO.
CS Sharad Bhargva