Am I Entitled to Gratuity After 4 Years as a Fixed-Term Employee? Seeking Legal Guidance

Hello. I worked for a PSU from February 2019 to June 2023 as a fixed-term employee. My contract was for 5 years, but I resigned and left after a tenure of 4 years, 3 months, and 12 days. Am I eligible to receive gratuity on a pro-rata basis as a fixed-term employee? If yes, which clause, rule, article, or law should I quote to my previous employer for claiming gratuity? Please help.

Hi, gratuity will not apply for 4 years, 3 months, and 12 days of service. Completion of 5 years is a requirement.

Dear Friend,

You are not entitled to gratuity under the existing provisions of the law. However, if the Industrial Relations Code 2020 is implemented, all fixed-term employees having more than one year of service will be entitled to gratuity as per the provision of Section 2(o) of the proposed code which reads as follows:

Fixed-term employment

2(o) "Fixed-term employment" means the engagement of a worker on the basis of a written contract of employment for a fixed period:

Provided that—
(a) his hours of work, wages, allowances, and other benefits shall not be less than that of a permanent worker doing the same work or work of similar nature;
(b) he shall be eligible for all statutory benefits available to a permanent worker 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; and
(c) he shall be eligible for gratuity if he renders service under the contract for a period of one year;

Regards,

Dr. Kamlesh Agrawal
Mumbai

As per the 2018 amendment to the Industrial Employment (Standing Orders) Rules by the Central Government, all fixed-term employees are eligible for statutory gratuity on a pro-rata basis, regardless of the statutory minimum qualifying service. Therefore, the worker is entitled to claim proportionate gratuity for the four years of service he has completed.