A private member bill titled the Terminated Employees (Welfare) Bill, 2020 (“Bill”) that has been introduced in the Rajya Sabha (Upper House of the Parliament) on February 7, 2020. The object of the Bill is to provide welfare measures to terminated employees for a period of nine months or till they are re-employed, whichever is earlier.

As per the Bill, an employee whose employment is terminated for the reasons of the winding up of the organization or the establishment for reasons including economic slowdown; change in relevant technology; insolvency of the owner or director managing the affairs of the establishment; orders of any court; inability to carry on business; or change in government policy, is eligible to the benefits contemplated thereunder. Employees terminated for proven misconduct, cheating, fraud, or for any crime would not be eligible for the benefits. In these instances, the eligible employees would, for a period of nine months or re-employment, whichever is earlier, be entitled to benefits such as:

(i)     unemployment compensation, which should not be less than sixty percent of the gross salary of the terminated employee; and

(ii)    health benefits, which would be on par with the benefits provided during the term of employment.

The Bill proposes the creation of a corpus fund to which at least five per cent of the net profit of the organization is to be credited and used for the welfare of the terminated employees.

A copy of the Bill, as introduced in the Rajya Sabha, is available here. To become a law, the Bill would have to be passed by both houses of the Parliament, receive the assent of the President, and be notified in the official gazette.