The labour ministry will soon extend full-benefit fixed-term jobs, already a feature in the labour-intensive garment and leather industries, to most other sectors. The move will have multiple benefits: It would boost creation of “formal jobs”, reduce instances of informal hiring which continues to be the norm in the unorganised sector and spare businesses the undue burden of keeping regularised contract employment, while their labour requirements are actually seasonal.
Labour minister Santosh Kumar Gangwar told FE that a draft notification extending fixed-term employment — with benefits similar to the permanent workforce — to most sectors will be issued soon. The final order will be issued only after evaluating the comments from industry, trade unions and other stakeholders, he said. When asked whether the minimum period of fixed-term employment will be defined, the minister said these and other details were being worked out.
No specific period is currently defined for fixed-term either in the garment sector — where the facility was introduced in June 2016 — or in the leather industry, where such short-term jobs were allowed last week.
Of the country’s estimated 50 million workforce, hardly 10% is in the organised sector and entitled to social security benefits such as provident fund and benefits like defined working hours, minimum wages, allowances and other statutory dues. Unorganised sector workers are mostly deprived of these benefits. Legitimising fixed-term employment with all these benefits across industries is important to avoid unproductive disputes and litigation and could encourage formal employment over informal employment, analysts said.
A provision of fixed-term employment, which is essentially a closed-ended contract between the employer and the employee, is already there in the Industrial Disputes Act, but to make it more foolproof, the fixed-term provision will be brought under the Industrial Employment (Standing Orders) Act, 1946, through the notification.
Rituparna Chakraborty, co-founder and executive vice-president, Teamlease Services, said, “This move shall positively influence the economy as it shall create more formal jobs, side by side allay fears of the employers of the risk of permanency even while employing workers for project-based or limited duration requirements.”