Fixed-term employment with benefits akin to the permanent workforce’s will soon be made a reality across all industrial sectors, a move analysts say would be a win-win situation for workers and companies but could still be opposed by the intransigent unions, who would give the new policy the dreaded “hire and fire” tag. The extant law is rather nebulous on formal fixed-term employment and it has hardly been tried in practice even as companies, especially those in industries with seasonal spurts in activity, warded off the unreasonable burden of regularised contract employment and opted for informal hiring, leaving workers in the lurch.
According to official sources, the Modi government, which ushered in full-benefit fixed-term jobs in the labour-intensive garment sector as part of an incentive package announced last month, is planning to extend the policy across industries. “A provision of fixed-term employment is already there in the Industrial Disputes Act, but to make it more foolproof, it will be brought under the Industrial Employment (Standing Orders) Act, 1946, through a notification,” a labour ministry official told FE, on condition of anonymity. He cited the example of the new labour policy for the garment sector, where a fixed-term worker would now be treated on par with a permanent worker in terms of working hours, wages, allowances and other statutory dues, and said if this is emulated in all other manufacturing and service industries, the current stagnation in job growth could be addressed to a large extent and “decent employments” could be generated.
Fixed-term employment would be especially conducive for sectors like construction, mining, and gems and jewellery that do not require regular workers through the year. It could also be replicated in other industries like automobiles that have witnessed protests over pay disparity among workers and are struggling under rigid rules for contractual employment
“Legitimising fixed-term employment across industries is important to avoid unproductive disputes and litigations and shall encourage formal employment over informal employment,” said Rituparna Chakraborty, co-founder and executive vice-president, Teamlease Services.