Govt proposes gratuity for fixed-term contract staff

Govt proposes gratuity for fixed-term contract staff

Workers who die or become disabled may also get gratuity before completing five years of employment.

At present, an employee has to complete five years to get gratuity but the government has proposed this change in the draft Code on Social Security, which is put out for public consultation. October 25 has been set as the deadline by the Ministry of Labour and Employment for submitting suggestions.

The government has also proposed to bring fixed-term employees, who generally are contracted for less than five years, under this provision so that they too get the benefit.

According to the draft Code, the "completion of continuous service of five years shall not be necessary where the termination of the employment of any employee is due to death or disablement or expiration of fixed-term contract or happening of any such event as may be notified by the Central Government".

In the case of death of the employee, the draft recommends, gratuity should be paid to his nominee or, if no nomination has been made, to his heirs. If the nominees or heirs is a minor, the share of such minor should be deposited with the competent authority, who should invest the same for the benefit of such minor in such bank or other financial institution, as prescribed by the government, until such minor attains majority.

For computing the gratuity payable to an employee who is employed on reduced wages after his disablement, it said, his wages for the period preceding his disablement should be taken to be the wages received by him during that period, and his wages for the period subsequent to his disablement shall be taken to be the wages as so reduced.

The draft Code seeks to amalgamate provisions of eight Acts, including The Employees‘ Compensation Act 1923, The Employees‘ State Insurance Act 1948, The Employees‘ Provident Funds and Miscellaneous Provisions Act 1952, The Maternity Benefit Act 1961 and The Payment of Gratuity Act 1972.

The employees who are seeking benefit under the scheme will also have to provide their Aadhaar number, the draft said.

The draft also recommends that an employer pay compensation to the worker if he or she contracts an occupational disease peculiar to that nature of the job. The worker has to be in the service of the employer for at least six months and then it will be deemed to be an injury by accident and unless the contrary is proved, the accident shall be deemed to have arisen out of and in the course of the employment.

It also says that an accident occurring to an employee while commuting from his residence to the place of employment for duty or from the place of employment to his residence after performing duty, should be deemed to have arisen out of and in the course of employment if nexus between the circumstances, time and place in which the accident occurred and his employment is established. 

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