Umakanthan53
Labour Law & Hr Consultant
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Asso.prof.(commerce & Management)

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Fixed Term Employees get all the benefits that of regular confirmed employees only the tenure of employment will be of three year. Our organisation is following CTC concept.
From India, Vadodara
Hello Mehul,
As you are aware, as per Gratuity Act, an employee thus covered under the act is eligible for gratuity if he/she completed 5 yrs.of continuous service. In the instance quoted by you, the person would have a maximum/fixed service of only 3 yrs. So there is no question of gratuity to him. However, it's left to your discretion whether to pay him or not and/or any amount, in any manner, in any name. CTC or other pattern has no locus-standi. However, there is widespread opinion in favour of payment irrespective of the tenure especially when an employee is covered under CTC which contains the component of gratuity also right from the first day of service. But legally there is no room.

From India, Bangalore
Sorry to differ from the view of Mr.Kumar in the back drop of the recent amendment to the IE(SO)Central Rules,1946 relating to the service conditions of FTC employees. If the PGAct,1972 is applicable to the establishment, then the FTC employee is entitled to gratuity proportionate to his actual length of F.T service notwithstanding the restrictions,if any imposed by the PGAct or the CTC.
From India, Salem
Thanks Mr.Umakanthan. I regret.
I stand corrected. The amendment brought in, all pl.see the press report and amendment attached to this effect.
BUSINESS STANDARD
Somesh Jha | New Delhi Last Updated at March 23, 2018 00:19 IST
"Fixed-term contract staff to get gratuity benefits like permanent employees
Under the Gratuity Act of 1972, employees completing five years of continuous service are eligible to get a gratuity payment when they leave the organisation
In a first, workers hired under fixed-term contracts will be entitled to gratuity at any time of leaving the job.
Till now, no one hired on a contract for a fixed period was entitled to any gratuity. Those in permanent employment were entitled to it only after they had completed five years.
Under recently notified rules, workers hired through afixed-term contract will get all the statutory benefits that permanent workers in the same establishment are entitled to. This includes employees’ provident fund and employees’ state insurance benefits, bonus,gratuity and other compensation in case of accidents or death while at work.
Under the Gratuity Act of 1972, employees completing five years of continuous service are eligible to get a gratuity payment when they leave the organisation. Last week, the Union government notified the Industrial Employment (Standing Orders) Central (Amendment) Rules. It may be noted that the term ‘industrial’ here covers all those in service establishments, too, with a workforce of at least 10 or more.
These new rules allow hiring of industrial workers on fixed-term contracts; this category did not formally exist in the rules till now. The rules now say all such workers would be “eligible for all statutory benefits available to a permanent workman proportionately according to the period of service rendered by him, even if his period of employment does not extend to the qualifying period of employment required in the statute”.
On seeking legal opinion, the law ministry informed its labour and employment counterpart that provisions under the Industrial Employment (Standing Orders) Act of 1946, under which the rules had been issued for allowing fixed-term contracts, are independent statutory provisions, with requirements under any other laws not impacting these.
“The Industrial Employment (Standing Orders) Act is independent and its provisions will also be interpreted independently. So, provisions of the Payment of Gratuity Act will not limit the functioning of the (former) Act,” the law ministry decided. It also cited the Constitution’s directive principles under Article 43 in this regard, saying “benefits provided to any class of workers will be seen as a pragmatic step furthering the constitutional goal”.
In sum, workers hired under fixed-term contracts will be entitled for gratuity from employers whenever their contract ends, even if they have not completed five years of continuous service.
Something permanent workers are also not entitled to, under present law. They have to complete at least five years of continuous service before becoming eligible for gratuity.
In another benefit to workers, the government has said an employer will not be allowed to “convert the posts of the permanent workmen existing in his industrial establishment” as fixed-term employment after notification of the new rules.
“This means the establishment will not be allowed to reduce the existing posts meant for permanent workers. This has been done to remove all apprehensions from trade unions that all permanent jobs will be converted into fixed-term contracts,” said a senior labour and employment ministry official."
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Also refer this link - ttps://www.citehr.com/594464-whether-fixed-term-contract-employees-eligible-gratuity.html
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The impact of this amendment is that now the employer can appoint a person for a fixed period on contract and after expiry of the contract, he will not be entitled to notice pay or compensation.
The central Govt. has included a new category of workman" Fixed term employment" by amending the Industrial employment (S.O.) Rules 1946. The notification has been issued on 16. 03.2018.
The impact of this amendment is that now the employer can appoint a person for a fixed period on contract and after expiry of the contract, he will not be entitled to notice pay or compensation. It will be covered under sec. 2(oo) (bb) of I.D. Act.
Such fixed term workman's hours of work, wages, allowances and other benefits shall not be less than that of a permanent workman; and (b) he shall be eligible for all statutory benefits available to a permanent workman proportionately according to the period of service rendered.
The provisions under the Industrial Employment (Standing Orders) Act of 1946, under which the rules have been amended to allow fixed-term contracts, are independent statutory provisions, with requirements under any other laws not impacting these, which mean provisions of the Payment of Gratuity Act will not limit the functioning of the Industrial Employment (S.O.) Act.
In sum, workers hired under fixed-term contracts will be entitled for gratuity from employers whenever their contract ends, even if they have not completed five years of continuous service.
Whereas the permanent workers are not entitled to gratuity under the Payment of Gratuity Act unless they complete minimum five years of service to become eligible for gratuity.
In another benefit to workers, the government has said an employer will not be allowed to “convert the posts of the permanent workmen existing in his industrial establishment” as fixed-term employment after notification of the new rules.
The amendment will aid the industry to employ workers in sectors which are of seasonal nature and witness fluctuation of demand and hence requires flexibility in employing worker. Before extending the facility of employing workers on fixed term to all sectors, it was initially introduced in apparel manufacturing sector in industrial employment (S.O.) Act in October 2016.
The amendment further stipulates that a temporary workman who has completed three months of continuous service shall be given two weeks’ notice of the intention to terminate his employment if such termination is not in accordance with the terms of the contract.
In case he has not completed three months of continuous services, he shall be informed for the reasons for termination in writing. It also provides that services of temporary employees shall not be terminated as punishment, unless he has been given an opportunity of explaining the charges of misconduct alleged against him.
As far as impact for this amendment in concerned, it is not going to be much effect on the present employment practices because this kind of employment category already exists and the employers have been appointing the workmen on fixed term since long even before this amendment via having such category in their certified standing orders. However, govt. has put a rider that the present permanent employees cannot be converted in fixed term employees on the demand of unions.
It will be myth this facility will discourage the employers from engaging workers through contractors and will employ directly. It’s expected that contract labour employment will remain an attractive proposition. Now the strength of permanent workmen will not increase and all possible future employment of employees on company roll will be only on fixed term basis.
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Now we have answer to the FT employees to the gratuity and other other benefits. However, the question arises are -
1. Will the IE (SO) Act will be made applicable to all establishments or not ?
2. What is the next course of action available to those not covered under these provisions ?

From India, Bangalore

Attached Files
File Type: pdf FTE Final Notification.Amendt.to IE(SO)Rules dt.2018.pdf (238.1 KB, 141 views)

Thanks for the information. I have one doubt, if any fixed term contract employee works only for 1/2/3 years, what is their eligibility. Is he eligible for gratuity for 1/2/3 years service? In most companies FTC’s are hired only for 11 months. In that case, the employer responsible for to pay gratuity for 11 months. Please confirm
From India, Hyderabad
Dear Abhiram,
The exact answers for your latest queries are already there in my reply and that of Mr.Kumar:what you have to do is to read them carefully once again.
Organizations which have FTCs less than one year duration should have valid reasons to justify them. Otherwise, anyone with the minimum degree of native intelligence and uncompromising sense of justice can easily conclude that such a contract is certainly an attempt to circumvent the provisons of law to make dishonest gains through unfair labor practice. But, you should remember that 240 days of continous service is suffice to claim gratuity.

From India, Salem
Hello,
Myself varun working in PSU government sector with Young professional designation.
I'm working her from past 6 months but as of now i'm not even getting a single benefit such as PF, leaves, statutory benefits etc except a monthly consolidated compensation of Rs. 50000/- per month.
Can i claim the rights?? If so how?? Please answer.

From India, Bengaluru
Hi Varun,
I presume you are a regular employee in this PSU, if so why they resorted to Consolidated compensation? As far as I know regular employment in PSUs on 'consolidated compensation' is a rare event. However, first you have to check your appointment letter/contract doc./agreement and ensure what any clause therein speaks about your benefits like EPF/Bonus, leave. I don't think a PSU would miss all these employee's compensation. Pl.check and revert

From India, Bangalore
Hi Sir,
I have appointed as a Young Professional under fixed term employment for 3 years.
In the offer letter provided dt. 09.07.2018 they have mentioned it as fixed term contract for 3 years.
My only concern is as per the gazette not. dt. 16.03.2018 under G.S.R 235 (E) can I claim the rights of statutory benefits in my organization????

From India, Bengaluru
In every case of FTC Employment, only the tenure of employment is mutually predetermined and fixed. The mutual rights, obligations and benefits of the parties arising out of the contract keep changing in tune with the statutory changes during the tenure so fixed earlier.
Therefore, the poster is entitled to all the statutory benefits applicable to his employment.

From India, Salem

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