One of the key highlights of the new labor laws is the provision for gratuity after just one year of employment. While this may seem like a significant change for all salaried workers, it specifically pertains to fixed-term employees as outlined in the recent labor law reforms.
Fixed-term employment refers to the hiring of individuals on a contractual basis for a specified period. This type of employment ceases automatically at the end of the contract duration without the need for formal termination procedures. Sectors such as manufacturing, textiles, construction, IT services, media production, logistics, hospitality, and export-related industries often utilize fixed-term hiring due to fluctuating work demands.
Under the new regulations, fixed-term employees are entitled to receive wages, leave, working hours, and social security benefits equivalent to permanent employees. This is designed to ensure that these workers are not treated as disposable labor but are integrated into the formal workforce.
Gratuity is a one-time payment provided by an employer to appreciate an employee’s long-term service. Previously, employees had to complete five years of continuous service to qualify for gratuity. However, many fixed-term workers could not meet this requirement as their contracts ended before reaching the five-year mark, leaving a significant portion of the workforce without this essential benefit.
The recent labor codes have introduced a significant change where fixed-term employees are eligible for gratuity after just one year of continuous service, even if their contract concludes within that year. In contrast, permanent employees still need to complete five years to qualify for gratuity, highlighting the specific consideration for fixed-term employment conditions.
This adjustment aims to bridge the gap where contract workers, who put in full-time efforts, were previously excluded from long-term financial benefits. Industries reliant on short-duration staffing, such as export-driven manufacturing, apparel, construction, IT, media, and digital production, are expected to be significantly impacted by this change.
The amendment not only ensures financial security for fixed-term workers but also aligns with the broader objective of modernizing labor laws and broadening social security coverage as envisioned in the labor codes.
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