The government has notified fixed term employment for all sectors through an amendment to the Industrial Employment (Standing Orders) Central Rules, 1946. Fixed-term employment for all sectors will make it easier for companies to hire-and-fire workers along with reducing the role of middlemen.
As per the the Industrial Employment (Standing Orders) Central (Amendment) Rules, 2018, a “fixed term employment workman is a workman who has been engaged on the basis of a written contract of employment for a fixed period”. No employer of an industrial establishment shall convert the posts of the permanent workmen existing in his industrial establishment on the date of commencement of the amended rules, that is, March 16 as fixed term employment thereafter, the notification stated.
The notified rules for fixed term employment provide for equal work hours, wages, allowances and other benefits as that of a permanent workman along with all statutory benefits available to a permanent workman proportionately according to the period of service rendered by him even if his period of employment does not extend to the qualifying period of employment required in the statute.
However, no workman employed on fixed term employment basis as a result of non-renewal of contract or employment or on its expiry shall be entitled to any notice or pay in lieu thereof, if his services are terminated. No notice of termination of employment shall be necessary in the case of temporary workman whether monthly rated, weekly rated or piece rated and probationers or badli workmen, it said.
The government had notified fixed-term employment for apparel manufacturing sector only in February 2017. In December, the Union Cabinet approved proposed extension of fixed-term employment to leather, footwear and accessories industries. Earlier this year in January, the labour ministry had issued a draft notification for extension of fixed-term employment for all sectors through amendment of the Industrial Employment (Standing Orders) Central Rules, 1946.
While presenting the Union Budget for 2018-19, Finance Minister Arun Jaitley had said that the facility of fixed term employment will be extended to all sectors.
The move towards fixed-term employment will make it easier for companies to layoff workers, which could have a bearing upon job creation in the country. As per the International Labour Organization’s World Employment and Social Outlook for 2018, India’s unemployment rate is estimated to rise to 3.5 per cent for 2018 from 3.4 per cent estimated earlier. In absolute terms, the country’s unemployment is estimated to have risen to 18.3 million in 2017 from 17.8 million projected earlier, while for 2018, the ILO estimates unemployment to increase to 18.6 million from 18.0 million estimated earlier in its previous employment outlook report.
Though the government has moved ahead in extending fixed term employment to all sectors, the consolidation exercise of 44 central labour laws into four major codes–industrial relations, wages, social security, and occupational safety, health and working conditions–is still pending by the government. The ‘Code on Wages Bill’ was introduced in Lok Sabha last August and is awaiting passage. The Code on Wages Bill. The Code on Wages, which proposes a national minimum wage, amalgamates provisions of the four labour laws of The Minimum Wages Act, 1948; The Payment of Wages Act, 1936; The Payment of Bonus Act, 1965, and The Equal Remuneration Act, 1976.