Parliamentary Panel: Eligibility period for payment of Gratuity to be reduced to One Year

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Parliamentary Panel: Eligibility period for payment of Gratuity to an employee after termination to be reduced to One Year 

New Delhi: The Standing Committee of the Parliament on Labour, in its report on Code on Social Security, 2019, has recommended that the eligibility period for payment of gratuity to an employee after termination be reduced, The Hindu reported.

Currently, an employee who has been in continuous service for more than five years is eligible for gratuity. Now, the committee has recommended that the minimum period of employment requirement be reduced to one year.

The committee headed by a Biju Janata Dal member of parliament submitted its report to speaker Om Birla on Friday and also recommended that gratuity should be provided to contract labourers, seasonal workers, piece rate workers, fixed term employees and daily/monthly wage workers.

“Most people are employed for a short duration period only, making them ineligible for gratuity as per extant norm. The committee desires that the time limit of five years as provided for in the code for payment of gratuity be reduced to continuous service of one year,” the report said.

It has also recommended that in case an employer is not paying the dues to an employee, the employee should have access to a redressal mechanism to hold the employer liable within a stipulated time frame.

“The Committee is of the considered opinion that such a provision is against the interest of the affected employees/workers who may have to run from pillar to post to get their legitimate dues,” the committee wrote about the existing mechanism in which the employee has to approach an authority for redressal.

“There should not be any leniency, as strong deterrent provisions would reduce wilful default and delinquent negligence on the part of employers in timely payment of gratuity to the needy and deserving employees,” the report notes.

The parliamentary panel also took note of the plight of migrant workers during the COVID-19 induced lockdown and has said that ‘inter state migrant workers’ be mentioned as a separate category in code on social security, 2019.

It also said that a welfare fund should be created for such workers. “The funds so created should exclusively be used for workers/ employees not covered under other welfare funds,” the committee said.