Under the new Labour Codes amending the Payment of Gratuity Act, 1972, it is stated that Fixed-Term Employees (FTEs) are eligible for gratuity after completing one year of continuous service.
As per the Act, a Fixed-Term Employee is defined as someone hired for a specific and limited duration through a written contract, which ends automatically unless renewed.
My query is:
Does the one-year gratuity eligibility apply only to Fixed-Term Employees, or does it also extend to permanent employees under the new Labour Codes?
Additionally, does the earlier requirement of five years of continuous service still remain applicable for permanent employees?
Looking forward to clarity on this. Thank you.
From India, Pune
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8As per the Act, a Fixed-Term Employee is defined as someone hired for a specific and limited duration through a written contract, which ends automatically unless renewed.
My query is:
Does the one-year gratuity eligibility apply only to Fixed-Term Employees, or does it also extend to permanent employees under the new Labour Codes?
Additionally, does the earlier requirement of five years of continuous service still remain applicable for permanent employees?
Looking forward to clarity on this. Thank you.
From India, Pune
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The new Labour Codes have indeed brought some changes to the gratuity eligibility criteria.
Firstly, under the new codes, Fixed-Term Employees (FTEs) are indeed eligible for gratuity after completing one year of continuous service. This is a significant change from the previous requirement of five years of continuous service.
However, for permanent employees, the situation is different. The new Labour Codes have not changed the gratuity eligibility criteria for permanent employees. This means that the earlier requirement of five years of continuous service still applies to them.
In terms of action steps, if you are an employer, it's important to update your HR policies to reflect these changes. Ensure that your Fixed-Term Employees are aware of their new rights and update your payroll systems to account for these changes.
For employees, whether fixed-term or permanent, it's important to understand these changes and how they impact your benefits. If you are a Fixed-Term Employee, you may want to discuss this with your HR department to ensure you receive your rightful benefits.
Lastly, keep in mind that these changes are part of a larger shift in labour laws in India, aimed at simplifying and modernising the legal framework for employment. It's crucial for both employers and employees to stay informed about these changes, as they can significantly impact employment contracts and benefits.
From India, Gurugram
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Firstly, under the new codes, Fixed-Term Employees (FTEs) are indeed eligible for gratuity after completing one year of continuous service. This is a significant change from the previous requirement of five years of continuous service.
However, for permanent employees, the situation is different. The new Labour Codes have not changed the gratuity eligibility criteria for permanent employees. This means that the earlier requirement of five years of continuous service still applies to them.
In terms of action steps, if you are an employer, it's important to update your HR policies to reflect these changes. Ensure that your Fixed-Term Employees are aware of their new rights and update your payroll systems to account for these changes.
For employees, whether fixed-term or permanent, it's important to understand these changes and how they impact your benefits. If you are a Fixed-Term Employee, you may want to discuss this with your HR department to ensure you receive your rightful benefits.
Lastly, keep in mind that these changes are part of a larger shift in labour laws in India, aimed at simplifying and modernising the legal framework for employment. It's crucial for both employers and employees to stay informed about these changes, as they can significantly impact employment contracts and benefits.
From India, Gurugram
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(Fact Checked)-Your reply is accurate. The 1 year gratuity rule applies only to FTEs. Permanent employees still need 5 years of continuous service for gratuity eligibility. (1 Acknowledge point)