Fixed term employment: Centre extends facility to all sectors

The government has extended the facility of hiring workers on fixed term employment to all sectors for improving the ease of doing business for players intending to hire people for completing specified projects, tasks or orders.
This facility was available only for the apparel manufacturing sector as per the Industrial Establishment (Standing Order) 1946. As per a notification issued by the labour ministry to amend the Order, words "fixed term employment in apparel manufacturing sector" will be replaced by "fixed term employment" meaning that facility would be available for all sectors.

In his Budget speech earlier last month, Finance Ministry Arun Jaitley had said, "the facility of fixed term employment will be extended to all sectors". The fixed term employment was introduced in apparel manufacturing sector in Industrial Employment (Standing Order ) Act in October, 2016.

The concept of fixed term employment defines the tenure of employment as well as other associated conditions of service and remunerations, which are provided to regular employees under various labour laws. The worker employed for short period will get better working and service conditions as compared to a contract worker.

The amendment to the Order provides that no notice of termination of employment shall be necessary in case of temporary and badli workmen. It also provided that fixed term worker would not be entitled to any notice or pay in lieu of that, if his services are terminated or in case of non-renewable of contract or expiry of term of employment.

The amendment further stipulates that a temporary workmen 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 for the reasons for termination in writing. It also provides that services of temporary shall not be terminated as punishment unless he has been given an opportunity of explaining the charges of misconduct alleged against him.

The fixed worker would be entitled to all benefits like wages, hours of work, allowances and others statutory benefits, not less than permanent workmen. The fixed term employment was defined as a workman who is employed on a contract basis for a fixed period. Thus the services of workman will be automatically terminated as a result of non renewal of the contract between the employer and the workman concerned. A separation of service of a workman as a result of non renewal of the contract of employment between the employer and workman concerned shall not be construed as termination of employment.

This facility will aid industry to employ worker in sector which are of seasonal nature and witness fluctuation of demand and hence requires flexibility in employing worker.

Under the fixed term employment the working conditions in terms of working hours, wages, allowances and other statutory dues of a fixed term employee would be at par with permanent workmen.

A fixed term worker will also be eligible for all statutory benefits available to a permanent workman proportionately according to the period of service rendered by him even though his period of employment does not extend to the qualifying period of employment required in the statute.

The employer can directly hire a worker for a fixed term without mediation of any contractor.