Workers can be hired for fixed term across sectors, says govt
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Workers can be hired for fixed term across sectors, says govt

The facility will aid the industry to employ workers in sectors which are of a seasonal nature and witness fluctuation of demand, thereby requiring flexibility in hiring workers.

business Updated: Mar 20, 2018 23:10 IST
Press Trust of India, New Delhi
Fixed term employment,Ease of doing business,Arun Jaitley
The facility provides that a fixed term worker would not be entitled to any notice or pay in lieu of that, if his/her services are terminated or in case of non-renewable of contract or expiry of term of employment.(Virendra Singh Gosain/HT PHOTO)

The government has decided to allow fixed-term or contractual employment in all industrial sectors, a provision that until had now applied only to apparel manufacturing. The move, once implemented, will effectively provide for a hire-and-fire policy by doing away with existing retrenchment norms applicable to factory workers.

The proposed amendment, which fulfils a longstanding demand of industry, is in line with the government’s overall aim of amending labour laws to improve the ease of doing business in India.

According to a notification to amend the Industrial Establishment (Standing Order) 1946, issued by the labour ministry, the words “fixed term employment in apparel manufacturing sector” will be replaced by “fixed term employment,” implying that hire-fire provisions will be applicable to all sectors.

The move was first proposed in the Union Budget speech of finance ministry Arun Jaitley on 1 February, in which he said “the facility of fixed-term employment will be extended to all sectors”.

After the amendment, “no notice of termination of employment shall be necessary in the case of temporary and badli workmen.” Fixed-term workers, however, would be entitled to all benefits like wages, hours of work, allowances and others statutory benefits, equivalent to those given to permanent workers.

Trade unions, both on the left and the right, slammed the move. “It is part of the government’s overall labour reform to make employment absolutely fragile just in the name of ease of doing business. It banishes regular employment from the country,” said Tapan Sen, general secretary of the leftist Centre of Indian Trade Unions, or CITU. Sen said this change was complementary with others in the domain of industrial relations laws to make employment more casual.

“Substitution of permanent and regular employment with contractual, fixed-term employment is no solution. Such a replacement is unacceptable to us,” said Brijesh Upadhyay of the Bharatiya Mazdoor Sangh, affiliated to the right-wing Rashtriya Swayamsevak Sangh, ideological parent of the ruling Bharatiya Janata Party.

In a comment on the proposed move to Mint newspaper, K.R. Shyam Sundar, a labour economist and professor at XLRI Jamshedpur, said: “Contract labour will not create decent jobs but may add to the job count. In an election year, it may be a good talking point for the government,” he said.

A fixed-term employee has been defined as a “workman who is employed on a contract basis for a fixed period”. His or her services will be terminated as a result of non-renewal of the contract with the employer. This would not be construed as termination of employment.

The amendment also provides that fixed term worker would not be entitled to any notice or pay if his services are terminated or in case of non-renewal of the contract or expiry of the term of employment.

Further, a temporary worker who has completed three months of continuous service shall be given two weeks’ notice of the intention to terminate his employment if such termination is not in accordance with the terms of the contract. In case he has not completed three months of continuous service, he shall be informed of the reasons for termination in writing.

First Published: Mar 20, 2018 17:55 IST