Promise of gratuity in 1 year, yet employees are not getting the benefit, know the reason for delay in labor codes

New Labor Codes: After the announcement of new labor codes by the Central Government, lakhs of private sector employees have great expectations regarding the facilities they will get at work. Under the new labor codes, a provision for gratuity has been made for fixed term employees after one year of service.

Earlier, 5 years of continuous service was required for gratuity. However, this change has not yet been implemented at the ground level. Companies are still working under the old rules. This decision has been taken by the Central Government to provide social security to the employees soon. Let us know why the employees are not getting its benefits….

Reason for delay in implementation of rules

The new labor codes come under the concurrent list in the country. Which means, the central government makes laws. However, to implement these rules, state governments have to notify their rules separately.

Unless state governments issue their own labor laws, companies are not legally bound to implement these laws. This is a major reason behind companies not implementing the new labor codes.

Companies are working under old rules

Most of the companies are working according to the old rules due to the state government not issuing rules. Companies are following the old rules to avoid possible legal problems or disputes in the future and to provide benefits of new labor codes to the employees.

Still following the 5 year rule for gratuity. Also, companies say that, if they implement new rules without clear guidelines, they may face problems in audit and investigation.

Reason for delay of state government

Keeping in mind the concerns of trade unions and MSME sector, state governments are adopting a cautious approach before taking any decision. Political and social reasons are also believed to be the reason behind the delay in implementing the new labor codes. Although some states have issued draft rules, the discussion is still going on in most of the states.

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