New gratuity rules: Are permanent employees also eligible for gratuity after 1 year of service under new labour code?

The rollout of 4 new labour codes has renewed curiosity among employees about gratuity rules, with many of them likely to benefit hugely from the labour reforms. The revised framework does offer a big advantage for fixed-term and contract workers by allowing them to qualify for gratuity after completing just one year of service compared to 5 years earlier. “The one-year gratuity eligibility rule is a new entitlement specifically created for fixed-term employees and does not apply to permanent employees. The standard eligibility period for permanent employees remains five years of continuous service. The only exception for the five-year rule for permanent employees would be in cases of employee death or disablement,” said Preetha Soman, partner, JSA Advocates and Solicitors. Read more