The practice of issuing appointment letters is rare among smaller organisations. This often denies an employee his due benefits and puts him in a disadvantageous position in case of any dispute. Aiming to plug this gap, the Union labour ministry is planning to make issuance of appointment letters a must under the code on occupational safety, health and working condition. The move is seen as a precursor to giving millions of informal-sector workers a semblance of social security benefits.
The provision, according to sources, will be made mandatory in the case of units having 10 or more workers. Though there are a few existing Acts which prescribe issuance of appointment letters to employees, they don’t make the same statutory. Taking advantage, employers try to evade legitimate responsibilities arising out of hiring people in their organisations, including those relating to professional hazards and mishaps.
A senior labour ministry official said the move would benefit an employee in many ways. The government is also mulling to prune the threshold limit for mandatory EPF benefits to 10 from 20 now, the official said. With the new move to make issuance of appointment letters mandatory for units with ten or more workers, any bid by smaller units to escape the proposed EPF cover for their employees by not legitimising their workforce could be thwarted. In addition, it will help fix employers’ responsibility towards their employees.
The labour ministry also feels that the appointment letter will ensure that at least one weapon will remain in the hands of workers to fight their case, and thus it will help maintain peace and harmony at the workplace to some extent.
“Suppose there is a dispute, where does the workman go to resolve the problem? Who will listen to his case if he does not have at least the appointment letter or any other proof that reveals his association with the organisation?” he said.
“It is an essential step to drive formalisation of workplace and provides youth with transparency around their wages and benefits. However, along with this, the government needs to focus on reducing the burden of excessive mandatory deductions that prompt formalisation by making them optional,” Rituparna Chakraborty, executive vice-president and co-founder, Teamlease Services.
RP Yadav, chairman and MD at Genius Consultants, described the proposal as a bold step.
The labour ministry official said under the code on occupational safety, health and working condition, which is yet to be finalised, 15 existing Acts would be amalgamated. Different threshold under different Acts would also be made uniform. “For example, the provision of canteen has different threshold under different Acts. Why would it remain so? There is no reason for different threshold,” he added.