Dear friends,

After a dispassionate consideration of the points for and against the entitlement of employment benefits, particularly, the payment of statutory gratuity in proportion to the actual length of fixed term contract of an employee in view of the amendment to the Industrial Employment(Standing Orders) Central Rules, I have a different perception based on the following points:

1) The amendment recognizes and extends yet another classification of workmen in all the industrial establishments coming under the purview of the IE(SO)Act,1946.

2) The amendment serves the dual purpose of enabling flexible hire and fire of employees on jobs of ad hoc or special nature that lasts only for a predictable duration and conferring the same employment benefits on such contract employees on par with the regular employees of the establishment.

3) The arrangement of payment of employment benefits in proportion to the actual length of the contract service notwithstanding any statutory minimum qualifying service also tends to curb the tendency of keeping workmen on contract basis indefinitely with occasional or intermittent artificial breaks.

4) The entire discussion revolves around the provisions of the minimum qualifying service u/s 4(1) of the Payment of Gratuity Act,1972 vis-a-vis the IE(SO)CENTRAL Rules,1946 as stand amended in 2018. In fact, according to the best of my knowledge and belief, this amended provision does not run counter to the completion of minimum qualifying service but by creating an agreement or contract of fixed term employment, actually confers on such employees the right to receive better terms of gratuity as provided for u/s 4(5) of the PGA,1972.

From India, Salem

I am in respectful agreement with the learned exposition of Umakanthan Sir above. The ''Fixed Term Employment'' was touted by the Government as an intervention made for securing better service conditions to fixed term appointees which is seen as a solution to the unemployment crisis gripping the nation. So when it is stated that "he shall be eligible for all statutory benefits available to ....... in the statute," the golden rule of legal interpretation is what does it imply in the ordinary and plain sense.
Undoubtedly Gratuity is a statutory benefit and it is available to the permanent workmen and there is a qualifying period of employment for it . So going by the Golden Rule of Interpretation the gratuity is covered. The object and purpose of the amendment was to make the Fixed Tenure Appointment a win win formula for both the employer and employee. If the intention was otherwise, there would have been a mention to the contrary as the gratuity is the first thing that comes to mind regarding eligibility of statutory benefit. So looked thus it is clear that proportionate gratuity is payable

From India, Mumbai
Dear Pritesh-Patel1,

This is with reference to your rejoinder to my answer to your query regarding gratuity eligibility for FTC workman.

I have since gone through the the 2018 amendment to Standing order which reads as below:

"He shall 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"

Please note that the Payment of Gratuity Act being a self contained code , there should be an amendmnet to the Act with specific mention of exemption as regards payment of gratuity to Fixed term contract workmen irrespective of tenure of service or whose tenure of service need not conform to 5 years of qualifying service .

Unless an amendment is made to the payment of gratuity act in conformity with the aforesaid amednded model standing orders , the paymnet of gratuity to FTW who rendered just 240 days of service does not arise.



From India, Chennai
Thanks everyone to give detailed explanation on the query.
From India, Mokameh

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