That extra something

After more than six decades of independence, we are still engaged in changing colonial names and designations — sometimes with good reason, at other times not. The relevance and suitability of colonial laws, such as those relating to homosexuality, sedition or land acquisition, are also matters of continuing debate. But we are not always aware of the deep-rooted and often pernicious colonial assumptions that lie behind many of our current laws and regulations. For instance, last year’s Union budget was followed by the passing of the Gratuity Act Amendment, 2010, raising the upper limit of gratuity payments from Rs 3.5 lakh to Rs 10 lakh. This has surely benefited millions of employees in both private and public sectors. However, it is strange that no one has asked the question why this statutory obligation of employers is still called a “gratuity”.

The Oxford English Dictionary defines “gratuity” as graciousness, favour or kindness. It is in this sense that students are sometimes given “grace marks” by our schools and universities. “Gratuity” also means “a gift (usually of money) of an amount decided by the giver”. The dictionary adds that in this sense the word means “tip” and is the most common way in which “gratuity” is now used. Alluding to an antiquated practice, the dictionary also tells us that “gratuity” used to mean “a bounty given to service personnel on discharge”.

All of these meanings were germane to its use during British rule when the term entered our bureaucratic vocabulary. “Gratuity” at that time did in fact mean a gratuitous payment made by an employer to a servant, whether on special occasions or at the end of service, as an appreciation for services rendered. In British society of the time, this would have been a practice characteristic of relations between employers belonging to the upper classes and their lower-class employees. But since there were few Europeans employed in menial occupations in India, gratuity became for the most part an extra payment made by European employers to their Indian servants. Put simply, the British just took over the familiar Indian practice of the bakshish. It is hardly surprising that Hobson-Jobson, that invaluable glossary of colloquial Anglo-Indian words, translates “bucksheesh” as follows: “tip is accurate, but is slang; gratuity is official or dictionary English”.

The British colonial army in the 19th century, which of course did employ lower-class Europeans as well as Indians, had, like many European armies of the time, a practice of gratuity as a bounty at the end of the period of active service. So did British companies in India, whether in shipping, manufacturing, railways or plantations. But the practice retained its character of a gratuitous payment by the employer; it was not an entitlement and, needless to say, there was no law that regulated its amount.

In the 20th century, the term “gratuity” did not appear any more in bureaucratic terminology in India in relation to the higher services in which Europeans were employed. The India Office List that historians often have to consult to find out the postings of civil and military officers in any given year or the service rules in a particular branch of government shows that at least from 1910 onwards there was no gratuity payment in any of the European services in India (the only exception was the nursing service, which is telling in itself). In the Indian services (such as the provincial civil services), however, certain categories of employees did get gratuities (as a one-time payment) and annuities (once every year), especially for termination of services on medical grounds. The racial distinction was clear: “gratuity” was not an appropriate payment for the colonial government to make to its male European employees, although it still continued in the case of female European nurses and Indians.

After Independence, the payment of gratuity on retirement or superannuation of a government servant was so much of a regular feature that it became, for all intents and purposes, an entitlement that was rarely, if ever, denied. This seems to have been the result of the evolution of a practice prevailing in the colonial provincial services. In the private sector, however, the situation varied greatly. For the most part, gratuity was a payment that largely depended on the whims of the employer or the organized strength of the trade union.

In 1972, as part of the spate of legislation proclaiming its progressive and pro-worker character, the government of Indira Gandhi enacted the Payment of Gratuity Act which made it mandatory for all employers in both public and private sectors to pay, on termination of employment, to all employees who had completed at least five years of service a gratuity amounting to 15 days’ pay for every completed year of employment. The law applied to all factories, mines, plantations, shops, offices, educational institutions and so on employing more than 10 persons and to all forms of termination of service such as dismissal, resignation, retirement or superannuation (the only exception was dismissal for gross indiscipline for which special rules and procedures were laid down). In short, the payment of gratuity became a mandatory obligation on the part of employers and a statutory entitlement of employees.

The question is: why is an entitlement that, by the intent of the law, has nothing gratuitous about it called a “gratuity”? The only explanation one can think of is the lazy forgetfulness that so often clouds our engagement with the continuing flow of everyday routine. “Gratuity” has merely become the official name of a one-time payment to which employees are entitled on resignation or retirement. As far as I am aware, there are no equivalent words that are commonly used in any Indian language. The English word is in universal circulation in India in blatant oblivion of the fact that in every country where English is spoken the word today means a tip and that in the not-too-distant past in this country it meant nothing more than a bakshish. As far as I know, only in India, Pakistan and Bangladesh is a severance pay of this kind still officially called a gratuity.

It is strange indeed that even our radical trade unionists have not noticed the bizarre anomaly of a democratic entitlement of workers enshrined in law by a democratic State being called a “gratuity”. While we continue to hear impassioned demands for the change of colonial names and practices, sometimes with dubious justification, why have we not heard a single voice calling for a change of this undemocratic and class-inflected terminology? After all, all it needs is a change of nomenclature for which the case is so patently obvious that it should not require much of a debate in Parliament. Or is it the case that our employers, whether public or private, still like to pretend that even when obligated by law, all they do when their employees leave service is make a gratuitous payment out of the goodness of their hearts?