Gratuity Claim Information - senior staff are telling them that is contract basis so he is not eligible

Dear Sir, My father is working one of the Publication but they are getting his salary slip like below

Name & Address of Establishment
MANAGEMENT CONSULTANCY E SERVICE
Ahmedabad
&
Name & Address of Unit / Contractor
LOK PRAKASHAN LTD (ADVT.)

my father is working since March 2014.

Looking at the above details are they eligible for Gratuity or not? Because all his colleagues & senior staff are telling them that is contract basis so he is not eligible but his PF & Everything cutting of Time & getting salary slip & everything. Request you to pls provide guidance for the above matter.

Dear Ankit,


To be eligible for gratuity under the Gratuity Act, an employee needs to have at least five full years of service with the current employer, except in the event that an employee passes away or is rendered disabled due to accident or illness. In these cases, gratuity must be paid.
“employee” means any person (other than an apprentice) employed on wages, in any establishment, factory, mine, oilfield, plantation, port, railway company or shop to do any skilled, semi-skilled, or unskilled, manual, supervisory, technical or clerical work, whether the terms of such employment are express or implied, [and whether or not such person is employed in a managerial or administrative capacity, but does not include any such person who holds a post under the Central Government or a State Government and is governed by any other Act or by any rules providing for payment of gratuity]. As far as the provisions of Payment of Gratuity Act, 1972 is concerned; I have no hesitation to say that the Contract labourers are certainly covered under Act since those contract workers work for the Principal Employer though under or through a contractor. Such workers are not engaged to do the own work/job of a contractor. What is material being that ‘for whom the work if done’ and not ‘under whom the contract labourers work’. If the service of contract labourers is availed by the establishment of the Principal Employer, the contract labourers, at least shall be deemed to be the workers of the Principal Employer.

Thanks
S.Kumar

Dear Ankit,
Your father is eligible for gratuity.

The employee on Fixed term employment was formally introduced in March 2018 by amending the Central Rules under the Industrial Employment (Standing Orders) Act, 1946. This allowed all types of industries to engage fixed term workmen.

The term fixed term employment is defined only under the Code on Social Security and Industrial Relations Code. There are two nuances that distinguish these definitions from one another. Under the Code on Social Security, the definition uses the term employee and does not contain clause-(c) found in the Industrial Relations Code. The IR Code on the other hand uses the term worker and contains the aforementioned clause which provides that a fixed term worker shall be eligible for gratuity if he renders service under the contract for a period of one year.

There is no exemption from the applicability of the Payment of Gratuity Act 1972 for the reason that it is a contract appointment. He has completed more than seven years of service so prima facie he is eligibile. Pl tell us the post and nature of duties assigned to your father.

Whatever the nature of appointment whether regular or fixed term contract basis or the manner of employment like that of outsourcing through a third party, once the employee completes the minimum qualifying service of 5 years in the same establishment to which the Payment of Gratuity Act,1972 is applicable, the employer is bound to pay statutory gratuity to such employee on the termination of his employment.

The Labour Codes referred to by Mr.Prabath are still in the waiting for their enforcement notification. As such, the existing PGA 1972 continues to operate and in the case of the poster's father being a contract labor under the existing CLRA Act 1970, then also the Publishing House has the liabilty towards statutory gratuity as Principal Employer as per the vicarious liability created u/s 21(4) of the CLRAA,1970.