Gratuity Promised After One Year, Yet Employees Not Receiving Benefits: Reasons for Delay in Implementing Labour Codes

Under the new Labour Codes, fixed-term employees are entitled to gratuity after one year of service. However, this change has not yet been implemented on the ground. Learn why...

New Labour Codes: After the central government announced the new Labour Codes, millions of private sector employees had high hopes regarding improved benefits. Under the new Labour Codes, fixed-term employees are entitled to gratuity after one year of service.

Previously, five years of continuous service were required for gratuity. However, this change has not yet been implemented at the ground level. Companies are still operating under the old rules. This decision was taken by the central government to provide social security to employees quickly. Let's understand why employees are not receiving this benefit...

Reasons for Delay in Implementing the Rules

The new Labour Codes fall under the Concurrent List in India. This means that the central government makes the laws. However, state governments need to separately notify their own rules for these laws to be implemented.

Until the state governments issue their respective labour laws, companies are not legally bound to implement these laws. This is a major reason why companies are not implementing the new Labour Codes.

Companies are Operating Under Old Rules

Most companies are operating according to the old rules because the state governments have not yet issued their regulations. Companies are following the old rules to avoid potential legal problems or disputes in the future and to avoid giving employees the benefits of the new Labour Codes.

They are still adhering to the five-year rule for gratuity. Companies also say that if they implement the new rules without clear guidelines, they may face problems during audits and inspections. Reasons for the State Governments' Delay

State governments are adopting a cautious approach before making any decisions, taking into account the concerns of trade unions and the MSME sector. Political and social factors are also believed to be behind the delay in implementing the new labor codes. While some states have released draft rules, discussions are still ongoing in most states.