Fixed-term employment extended to all sectors to boost ease of business

NEW DELHI: The government has extended the facility of hiring workers on fixed-term employment to all sectors to improve the ease of doing business, meeting the announcement made in the Union Budget. It has also given in to a major demand of the trade unions — that no permanent employee be moved to fixed term employment.

The facility for hiring on fixedterm contract was initially available only for the apparel manufacturing sector as per the Industrial Establishment (Standing Order) 1946.

According to the notification 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.


Fixed-term employment was defined as a workman who is employed on a contractual basis for a fixed period. Thus the services of the workman will be automatically terminated as a result of non-renewal of the contract between the employer and the workman concerned.

Aseparation 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 workers in sectors which are of seasonal nature and witness fluctuation of demand and hence requires flexibility in employing workers.

In his Budget speech last month, finance minister Arun Jaitley had said: “The facility of fixed-term employment will be extended to all sectors”.

Fixed-term employment was introduced in apparel manufacturing sector in Industrial Employment (Standing Order) Act in October, 2016. The employer can directly hire a worker for a fixed term without mediation of any contractor.

The fixed-term worker would be entitled to all benefits such as wages, hours of work, allowances and others statutory benefits, not less than permanent workmen.

UNION DEMANDS
In the notification, the government said “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 industrial Employment (Standing Orders) Central (Amendment) Rules, 2018 as fixed-term employment thereafter.”

ET reported in the first week of March that the ministry has gone back to the drawing board to reframe the fixed-term contract notification it issued in January after stiff opposition from trade unions.

They see the proposed amendment to rules as paving way for converting permanent workers into contract workers on fixedterm besides facilitating hire-andfire for employers.