Terminated Employees (Welfare) Bill, 2020

Feb 25, 2020 | by Avantis RegTech Legal Research Team

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Labour Compliance

The Terminated Employees (Welfare) Bill, 2020 has been introduced in the Rajya Sabha on February 07, 2020 to provide welfare measures for the employees who have been terminated by the employers and for matters connected therewith or incidental thereto. The Bill shall not apply to terminated employee who has been terminated for proven misconduct; cheating; indulging with fraudulent means and appropriate money; or having been found guilty by a criminal court of justice.

This Bill will provide benefits to terminated employer, an employee whose employment is terminated for the reasons of the winding up of the organization or the establishment due to economic slowdown; change in technology in the respective field; or the owner or director managing the affairs of the establishment becoming insolvent; or the orders of any court; or incurring losses and unable to carry on the business; or the change in Government policy shall be entitled to unemployment compensation health insurance benefits or any other benefits prescribed by the Central Government, if such benefits are not part of the employee-employer agreement for 9 months or till the time he gets employed elsewhere, whichever is earlier. The unemployment compensation shall not be less than 60% of the gross salary of the terminated employee or as per the terms of the employee-employer agreement, whichever is higher and it shall be borne by the employer.

A terminated employee shall be entitled to the terminal benefits on the cessation of employment like provident fund, gratuity, leave encashment etc. If the employer is not able to pay the benefits within one month from the date of the termination of the employment, the employer shall pay to the terminated employee an interest at the rate of 12% per month for such delay. A corpus fund must be created by every employer to which at least 5% of the net profit of the organization shall be credited, which shall be used for the welfare of terminated employees.

[Bill No. V of 2020]


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