Fixed Term Employment in Code on Wages

Hi All,

Firstly Thank you @Bhuvana_Anand for the detailed article on Code on Wages- . It’s all at one place and very useful reference.

Can the community experts share some details on Fixed Term Employment mentioned in the codes? Are they same as contract employees?
Also is gratuity payment involved for this fixed term employees?


Fixed-term employment is a contract in which a company or an enterprise hires an employee for a specific period of time. In most case, it is for a year but can be renewed after the term expires depending on the requirement. In fixed-term employment, the employee is not on the payroll of the company.

The workers employed for a limited period i.e. For a set period under fixed-term employment contracts shall be useful to them as compared to contract employees. He shall be eligible for getting all advantages which can be found for any everlasting workman for a similar work content material.

On gratuity, under Section-53(1)(d) of the Code on Social Security. It provides that gratuity shall be payable on termination of contract period under fixed term employment. The second proviso under the above states that the five years continuous service requirement shall not be necessary in cases of expiration of fixed term employment. The third proviso to Section-53(2) stipulates that in the case of fixed term employee’s gratuity shall be paid on a pro rata basis.

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