Home company law Termination Employees Welfare Bill 2020

Termination Employees Welfare Bill 2020

This article is written by Janvi Johar, 2nd year student pursuing B.A.LLB (H) from Amity University, Noida.

INTRODUCTION

In the recent scenario, the role of the private sector has increased substantially. However, to date, there is no law that governs employers to provide post-employment benefits to their terminated employees. Hence, the threat of sudden termination and job insecurity prevails among the private sector employees. In order to reduce these threats, a bill was introduced in the Rajya Sabha in February 2020, which came to know as the “Termination Employees (Welfare) Bill 2020”.

In this article we shall focus and discuss the key provisions of this bill.

Termination Employees Welfare Bill 2020

KEY PROVISIONS

(1) Who is an Employer?

According to this bill, an employer is a person who is the owner or director of any private establishment with 10 or more people working in the same establishment. This definition does not include any establishment which is owned or funded by either central or state government.

(2) Who is a Terminated Employee?

According to this bill any person who has been terminated from his services whether with a permanent or temporary job.

(3) Eligibility

An employee will only be eligible to avail the benefits under this bill if his/her job was terminated on the following grounds-

  • economic slowdown
  • change in technology in the respective field
  • the owner or director managing the affairs of the establishment becoming insolvent
  • the orders of the court
  • incurring losses and unable to carry on the business
  • the change in Government policy.

However, if the employment is terminated on the grounds of proven misconduct, cheating, indulging in fraudulent means, misappropriation of money; or having been found guilty by a criminal court of justice, then the employee will not be liable for any benefits accorded under this bill.

(4) Duration

The benefits accorded under this bill will only be valid until a period of 9 months post-termination.

(5) Payment of Interest

If the employer fails to provide the benefits within 30 days of termination, then the employer is liable to pay 12% per month.

CONCLUSION

This bill rightly highlights the threat of sudden termination of private-sector employees. However, this bill lacks clarity and has imposed an immense burden on the employer, which can be considered as anti-industry. Furthermore, there are no remedies for the non- compliance of any provision of this bill. Lastly, the bill can be considered ill-timed due to the current slowdown in the global economy because of the COVID-19 pandemic.

This article is edited by Rupreet Kaur Dhariwal.

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