Now, gratuity after 1 year to contract workers

New Delhi: The Payment of Gratuity Act mandates a minimum five years of continuous service for one to be eligible for gratuity, but the Centre now plans to reduce it to just one year in case of the employees with the fixed-term contracts. This provision is proposed to be inserted in the draft Industrial Relations Code. The government informed the parliamentary standing committee on labour about its plan to reduce the ceiling.

An employee gets gratuity at the rate of 15 days' wages for every year completed.

The committee members, however, sought extension of the benefit to all sections of the employees as pressed by the trade unions. The committee, headed by the BJD's Bhrtruhari Mahtab, has sent a resolution to the government recommending the benefit of the reduced ceiling to all types of employees.

The government is, however, keen to give it to the fixed-term workers whose employment ends with the lapse of the contract. They are mostly the low-ranked staff such as labourers, factory operators, helpers and drivers. The labour secretary says the contract workers are so far deprived of any gratuity that the government seeks to remedy by making a provision specifically for them.

Mahtab says gratuity is part of the universal social security and so he cannot understand the logic of denying it to some sections of the employees. He said the committee's recommendation is for universalisation of the social security.

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