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Reduce gratuity payment period to 1 yr, extend it also to daily wagers — Parliament panel says

Parliamentary panel on labour wants 'inter-state migrant workers' to be mentioned as a separate category in the Code on Social security, 2019.

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New Delhi: The Parliamentary Standing Committee on Labour, in its report on Code on Social Security, 2019, has recommended that the time limit for payment of gratuity to an employee after termination of employment should be reduced from the current five years of continuous service to just one year.

The committee, which submitted its report to Lok Sabha Speaker Om Birla Friday, also said the provision of gratuity should be extended to all kinds of employees, including contract labourers, seasonal workers, piece rate workers, fixed term employees and daily/monthly wage workers.

Recommending the reduction of time limit, the committee noted in its report, “…most people are employed for a short duration period only, making them ineligible for gratuity as per extant norms…the committee desires that the time limit of five years as provided for in the code for payment of gratuity be reduced to continuous service of one year.”

This code will replace nine existing social security laws and is pending before Parliament. The parliamentary committee, headed by senior BJD MP Bhartruhari Mahtab, had examined the code referred to it by the Lok Sabha last December.

Also read: Migrant workers, freelancers must be under social security net, Parliamentary panel suggests

‘A welfare fund for inter-state migrant workers’

Considering the migrant crisis, which had unfolded in the wake of a nationwide lockdown, the parliamentary panel has also recommended that “inter-state migrant workers” be mentioned as a separate category in the Code on Social Security, 2019 and a welfare fund be created exclusively for them.

The fund should be financed proportionately by the sending states, the receiving states, the contractors, the principal employers and the registered migrant workers.

“The funds so created should exclusively be used for workers/employees not covered under other welfare funds,” the committee said.

ThePrint had reported on 30 July that the parliamentary panel has also recommended universalisation of social security coverage to include domestic workers, migrant workers, gig workers (freelancers), platform workers (who access other organisations using online platforms and earn money, such as Uber, Ola drivers) and agricultural workers.

To address issues of identification and help in inter-state portability while extending welfare aids, “especially at the time of distress and exigencies like Covid-19 pandemic”, the panel has called for the creation of a central online portal and database of registered establishments as well as migrant workers, including building and other construction staff.

The parliamentary panel has said it should be made mandatory for all establishments, including agricultural, non-agricultural, contract as well as self-employed workers to register under one body, instead of multiple organisations. This body “should remain responsible for provision of social security for all types of workers in the country”.

‘Misuse of Building and Construction Workers Welfare Fund’

The parliamentary panel came down heavily on states for under-utilisation and misuse of the Building and Construction Workers Welfare Fund.

“The committee is perturbed to note the latest audit findings on underutilisation of BOCW funds by as many as 24 states and misutilisation of such funds by one state. It is a matter of serious concern that states are sitting on thousands of crores of rupees collected towards the welfare of construction workers, even as labourers have been left to fend for themselves amid the prolonged lockdown period arising out of the Covid-19 pandemic,” the report states.

The committee has recommended an enabling mechanism in the code itself for portability of Building and Construction Workers Welfare Fund among states so money due to beneficiaries can be paid in any state irrespective of where the cess has been collected.

The Building and Construction Workers Welfare Fund is raised by levying a cess of 1 per cent of the construction cost. It is part of the Building and Other Construction Workers (BOCW) Act, 1996, which regulates employment and working conditions of construction workers and also provides for their safety and welfare measures.

Also read: Directly employed, self-employed also ‘migrant workers’ under Modi govt’s new definition


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