If you are employed, then there is good news for you. Now the rule of gratuity has changed for fixed-term employees. The government has passed three Labor Code Bills on Wednesday. These include Occupational Safety, Health and Working Conditions Bill – 2020, Industrial Relations Bill – 2020 and Social Security Bill – 2020. The rule of gratuity is mentioned in Chapter 5 of the Social Security Bill, 2020.
No minimum term condition for fixed-term employees
Under this, provision has been made for payment of gratuity for fixed-term employees. And there will be no condition for the minimum service period. For the first time, a fixed-term employee who is working for a specified period is given the right to social security like a regular employee. Fixed-term refers to the employees working on the contract.
Chapter 5 states that gratuity will be paid to the employee for five consecutive years of service at the end of the job. It will be on retirement, retirement or resignation, death or disability from accident or illness. However, in the case of working journalists, it will be three years instead of five years.
Apart from this, five consecutive years of service will not be necessary where the termination of the job will be due to the death or disability of an employee or fixed-term appointment or any such event notified by the Central Government.
Employees who work in the seasonal establishment and do not stay in the appointment throughout the year, the employer will have to pay gratuity on the basis of seven days’ salary for each season. Employers who are in a fixed-term job or who have died, the employer has to pay the gratuity on a pro-rata basis.
On bringing fixed-term employment into the IR Code, Gangwar said that the service conditions, salary, leave and social security of fixed-term employees will also be the same as a regular employee. In addition to this, fixed-term employees have also been given the right to pro-rata gratuity.
What is gratuity?
Apart from salary, pension and provident fund, gratuity is also given to the employees working in the same company for a long time. Gratuity is the reward received by an employee from the company. If the employee fulfills certain conditions of the job, gratuity will be paid to him under a prescribed formula in a guaranteed manner. A small portion of gratuity is deducted from the salary of the employee, but the major portion is paid by the company.
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