The Union Government may reduce the time limit to claim gratuity from existing 5 years to 3 years. Sources close to the development informed Zee Business' Prakash Priyadarshi, " the issue is being discussed at the labour ministry and a consensus on reducing the deadline for claiming gratuity from 5 years to 3 years has been reached with the industry. However, the labour unions are asking for more reduction in the deadline."

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Talks are going on with all parties involved in the demand and a decision in this relation will be taken soon. According to the sources, change in the limit of the minimum number of employees in any establishment for the Gratuity is also being considered.

On being asked about the time by which the discussions will be put on paper, the labour ministry sources informed that the reduction in the deadline to claim the gratuity for regular employees is just a matter of time because it has been reduced technically. 

While talking about the technical aspect of reduction, the source referred to the fixed term employment notification that has been notified. Under the notification, every company is supposed to provide similar facilities like Gratuity to the Fixed Term Employees that is being provided to a permanent employee. Interestingly, as per the notification, a first-term employee is supposed to get the benefits even if he/she has not completed a deadline of 5 years in the office. 

According to Paragraph 3 of the Schedule 1A of the notification on Fixed-term employment, "A fixed term worker will also be eligible for all statutory benefits available to a permanent workman proportionately according to the period of service rendered by him even though his period of employment does not extend to the qualifying period of employment required in the statute that is required to claim the benefits of gratuity, which is 5 years of regular employment. 

Thus, the section says, the amount of gratuity should be provided to the employee in proportion to the time of his employment with the company. 

Definition of Fixed-Term employment 
In terms of a workman, fixed term employment has been defined who is employed on a contract basis for a fixed period of time. Thus the services of a workman will be automatically terminated as a result of non-renewal of the contract between the employer and the workman concerned. 

In a fixed-term employment, the employee is not on the payroll of the company. 

Watch this Zee Business video on Gratuity

Earlier, the Payment of Gratuity (Amendment) Bill, 2018 which was passed by Lok Sabha on  March 15, 2018, and by the Rajya Sabha on March 22, 2018, has been brought in force on March 29, 2018.

The amended Act hikes upper ceiling on gratuity amount to Rs 20 lakh from Rs 10 lakh and increases the maternity leave for female employees from ‘12 weeks’ to 26 weeks.