Massive change in Gratuity rules! No need to wait 5 years, Modi Govt’s big announcement
Gratuity Rule: Great news has arrived for contract or fixed-term employees courtesy of the Central Government. Ending a long wait, a massive relaxation has been introduced in the rules for claiming gratuity. Until now, an employee had to work continuously for at least five years to be eligible for gratuity. However, under the new Labour Codes, this period has been reduced to just one year. This means that from now on, fixed-term employees will be eligible to receive gratuity after completing just one year of service. This historic change was paved following the notification of four Labour Codes by the Central Government on Friday.
With this move by the Narendra Modi government, 29 scattered and old labour laws have been consolidated under a single structured framework. These four new Labour Codes are: the Code on Wages, the Industrial Relations Code, the Code on Social Security, and the Occupational Safety, Health and Working Conditions Code. It is worth noting that while these codes were passed in Parliament nearly five years ago, the notification has finally been issued after a long process.
Fixed-Term Employees to Get Benefits at Par with Permanent Staff
One of the most significant aspects of these new labour codes is the protection of the rights of contract employees. Previously, fixed-term employees were deprived of many benefits that permanent workers enjoyed. However, the new rules clarify that fixed-term employees will now receive all facilities just like permanent staff. These include:
- Leave: Entitlement to leave at the same rate as permanent employees.
- Medical Benefits: Access to all medical-related facilities.
- Social Security: Benefits of Provident Fund and other social security schemes will be ensured.
7 Major Guarantees by the Modi Government
Following the notification of these four Labour Codes on Friday, Union Labour Minister Mansukh Mandaviya stated that through this new framework, the Modi government is ensuring multiple ‘guarantees’ for the country’s workers and employees. Apart from gratuity, several other important benefits have been added under these codes. According to the Labour Minister, the 7 major guarantees provided by the government are detailed in the table below:
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Join on Telegram| Sl. No. | Benefit or Guarantee | Details |
|---|---|---|
| 1 | Minimum Wage | Guarantee of minimum wage for every employee within a stipulated time. |
| 2 | Appointment Letter | Guarantee of providing a valid appointment letter to the youth upon joining a job. |
| 3 | Equal Pay & Respect | Ensuring equal pay and equal respect for women in the workplace. |
| 4 | Social Security | Guarantee to bring approximately 40 crore workers under the ambit of social security schemes. |
| 5 | Free Health Check-up | Guarantee of free health check-ups for workers aged 40 years and above. |
| 6 | Overtime Pay | Guarantee of double payment for working overtime beyond scheduled hours. |
| 7 | Safety in Hazardous Jobs | Guarantee of providing 100% health safety for those working in hazardous sectors. |
It is expected that crores of workers and employees across the country will benefit from the implementation of these new Labour Codes. Specifically, these rules bring immense relief to people associated with the unorganized sector and contract-based jobs. Experts believe that bringing the complexities of 29 separate laws under one umbrella will also accelerate administrative processes.
