A Contract labor is different from a Fixed term contract employee as per the definition clauses (19) and (34) of section 2 of the Code on Social Security,2020 respectively
A contract labor is a person whose services are engaged through a contractor by another person called principal employer resulting in no contract of employment between the contract labor and the principal employer whereas a fixed term contract employee is one who is directly employed by the employer for a fixed period under an agreement. Thus a direct contract of employment but for the predetermined period subsists between the two.
Payment of gratuity contemplated u/s 53 of the Code does not require the completion of the minimum qualifying continuous service of not less than 5 years but entitles on pro rata service basis by virtue of the third proviso to section 53 (2) read with section 2 (34) (b) of the Code in respect of an FTC employee.
In view of the above provisions, as far as a contract labor is concerned, the eligibility condition of completion of the minimum qualifying service under the employer remains the same like any other employee for the purpose of claiming gratuity under the Code and not on pro rata basis.
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