A Bill has been introduced in Rajya Sabha seeking to provide minimum 9 months’ time with assured income in case of termination of employees due to economic slowdown, employer becoming insolvent and change in technology among others.

The Terminated Employees (Welfare) Bill, 2020, was introduced recently. It proposes that, if an employee gets terminated due to economic slowdown, change in technology, court order, the employer becomes insolvent and the owner is unable to carry business and change of government, then he is entitled for unemployement benefits.

This Act shall not apply to terminated employee who has been terminated for any of the following reasons:-

(a)proven misconduct;

(b) cheating;

(c) indulging with fraudulent means and appropriate money; or

(d) having been found guilty by a criminal court of justice.

An employee whose employment is terminated for the reasons of the winding up of the organization or the establishment due to:—

(i) economic slowdown; or

(ii) change in technology in the respective field; or

(iii) the owner or director managing the affairs of the establishment becoming insolvent; or

(iv) the orders of any court; or

(v) incurring losses and unable to carry on the business; or

(vi) the change in Government policy;

shall be entitled to such unemployment compensation health insurance benefits or any other benefits as may be prescribed by the Central Government, if such benefits are not part of the employee employer agreement, for nine months or till the time he gets employed elsewhere, whichever is earlier.

NOTE 1:- The period of nine months shall include the notice period to be served by the employer before termination.

NOTE 2:- The unemployment compensation shall be admissible if the employer does not provide any severance package to the terminated employee or the severance package is less than the compensation provided under this Act.

The unemployment compensation shall not be less than sixty per cent. 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. Health insurance benefit shall continue till the period as specified for nine months or till the time he gets employed elsewhere, whichever is earlier with the same terms and conditions which prevailed during his employment.

A terminated employee shall be entitled to the terminal benefits on the cessation of employment like provident fund, gratuity, leave encashment etc. Benefits notified shall be paid to the terminated employee from the month following the month on which termination is communicated to the employee or completion of the notice period, if any, whichever is earlier. If due to any reason, 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 twelve per cent. per month for such delay.

Nothing in this Act shall apply to any terminated employee if benefits admissible under the employee-employer agreement, are higher than the benefits prescribed under this Act.

Every employer shall create a corpus fund to which at least five per cent of the net profit of the organization shall be credited, which shall be used for the welfare of terminated employees.

Every employer shall be entitled to solicit contribution from any organization, individual or trust for the purpose of maintaining the fund, in such manner as may be, prescribed. Fund shall also be utilized for the following purposes, namely:-

(a) payment of expenditure in connection with the education of the children of the terminated employees; and

(b) medical facilities, free of cost, in such a manner as may be prescribed.

Central Government shall, after due appropriation made by Parliament by law in this behalf, provide adequate funds for carrying out the purposes of this Act.