Understanding Gratuity Eligibility for Casual Labor in PSU Banks Under New Labor Codes

Eligibility for Gratuity for Casual Labor in PSU Banks

The query is in respect of a PSU Bank engaging casual labor for day-to-day operations such as branch cleaning, etc. If a person is engaged in casual labor on an intermittent basis, does he become eligible for a gratuity claim as per the new labor code?

Benefits for Casual Labor Under the New Labor Codes

As per the new labor codes, what benefits accrue to casual labor not employed for 240 days in continuation, and how would it differ if the person is engaged for 240 days?

Exploitation of Casual Labor and Gratuity Eligibility

This is another classic example of exploiting casual labor. One sweeper may work for years but is not engaged for the full month, depriving him or her of gratuity payment. In my opinion, gratuity should be paid.

Legal Perspective on Gratuity Payment

Now, let's come to the legal point. According to the new Social Security Code, Chapter V, clauses 53(2), and 54(B & C) explain the conditions for gratuity payment for less than 240 days of work in a year. Please read those two clauses in detail to clarify any doubts.

Regards, S K Bandyopadhyay (WB, Howrah) CEO- USD HR Solutions [Phone Number Removed For Privacy-Reasons]

Classification of Employees Under Gratuity Acts

Neither the existing Payment of Gratuity Act, 1972 nor the yet-to-be-notified Code on Social Security, 2020 classifies employees into permanent, temporary, or casual for the purpose of continuous service under Sections 2-A or 54 respectively. Both are in pari materia only. However, for the purpose of concession only, they distinguish establishments based on their work schedule: working for 6 days a week, less than 6 days a week, working below the ground in a mine, and seasonal working of the establishment under Sections (1), (2), and (3) of Section 2-A of the former and clauses (A), (B), and (C) of Section 54 of the latter.

Therefore, unless the intermittent breaks are caused at the instance of the employer for bogus reasons, a casual employee cannot stake his claim for gratuity when he has not completed the threshold number of days under the respective category.