Understanding Gratuity Eligibility for Temporary Workers and Employee Benefits

Dear All,

Please guide me on the below matter. In our factory, where there are a number of temporary workers working continuously for 240 days in a year or more than that with all statutory coverage, whether 1 year or multiple years can be considered as permanent under any specific act. Also, I would like to know if such employees, if they are working for more than 5 years, are eligible for gratuity when they leave the company or their service is terminated.

Thanks,

They are eligible for gratuity after five years.

Varghese Mathew

If your company is located in Tamil Nadu, you are required to make the employees permanent as per the Tamil Nadu Industrial Establishment (Conferment of Permanent Status to Workmen) Act of 1981 after completion of 480 days (2 years). Otherwise, the workmen have the option to appeal to the Deputy Chief Inspector of Factories.

Hi,

Workmen who have completed a period of 240 days in a calendar year are entitled to all the benefits under different statutes. It is a misconception that those who have completed 240 days of work are temporary employees. Actually, temporary employees are identified as such if they are engaged in work of a purely temporary nature. Work of a purely temporary nature does not spread over for years. Please also refer to the Standing Orders of your organization, if you have them, in this regard.

I am sure this clarifies the position.

S.K. Johri

Dear Shedge,

I agree with the posting of Sh S.K.Johri mentioing that temporary employees are identified since they are engaged on a work of purely temporary nature & work of a purely temporary nature does not spreadover for years.The workman has been defined under Schedule I (Model Standing Orders) of the Industrial Employment (Standing Orders) Act,1946.The definition of temporary workman under the Act goes as under :-

A “temporary Workman” shall mean one who has been appointed for work of a temporary nature or which (work) terminates at the conclusion of specified contract time or who is temporarily employed as an additional employee in connection with a temporary increase in work of a permanent nature or for other reasons.

As defined under Section 25B of the Industrial Disputes Act,1947 a workman is said to be in continuous service under an employer if during a period of twelve calendar months preceding the date with reference to which calculation is to be made, has actually worked for not less than (i) one hundred and ninety days in the case of a workman employed below ground in a mine; and (ii) two hundred and forty days in any other case. In that eventualities,he shall be eligible to draw all the benefits viz lay off/retrenchment compensation etc. and also eligible to raise an individual dispute over his termiantion.

A similar definition of continuous service is repeated under Section 2A of the Payment of Gratuity Act, 1972 and if an emp[oyee completes a period of FIVE years of continuous service, then he is eligible for the payment of gatuity under the Act.

BS Kalsi