While presenting the Union Budget
earlier this year, Finance Minister Arun Jaitley had said
that fixed-term employment would be
allowed in all industrial sectors. Following up on the announcement, the
union government this month extended the
facility to all sectors through the amended Industrial Employment (Standing
Orders) Central Rules, 2018.
The move is expected to promote ‘ease of doing business’, as it reduces the
role of middlemen and allows companies to hire
workers based on seasonal trends. Trade unions across the country, however,
say the government took the step without consulting them. They argue that such
Rules would lead to a situation where
only fixed-term jobs are created, leading to the elimination of permanent jobs.
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| Image Credit: The Economic Times |
Fixed-term employment
The Industrial Employment
(Standing Orders) Central (Amendment) Rules, 2018, notified by the Ministry of
Labour and Employment, defines a
fixed-term employment workman as one who has been “engaged on the basis of a
written contract of employment for a fixed period”. The Rules state that no
employer of an industrial establishment shall convert the position of the
permanent workmen existing in his industrial establishment on the date of
commencement of the amended Rules, that is, March 16, as fixed-term employment
thereafter.
The move towards fixed-term employment will make it easier for
companies to lay off workers, thus impacting job creation. As per the International Labour Organisation’s
World Employment and Social Outlook: Trends 2018 Report, India’s unemployment rate for 2018 is
expected to be 3.5%, more than the estimated 3.4%. In absolute terms,
unemployment is estimated to have risen to 18.3 million in 2017 from 17.8
million projected earlier; for 2018, the ILO estimates unemployment to increase
to 18.6 million from the 18 million estimated in its previous employment
outlook Report.
Start, stop, start, stop
The central government had notified fixed-term employment for the
apparel manufacturing sector in October 2016. In December 2017, the union
cabinet approved the proposed extension of fixed-term employment to the
leather, footwear and accessories industries. In January 2018, the Labour
Ministry issued a draft notification for extension of fixed-term employment to
all industrial sectors through an amendment of the Industrial Employment
(Standing Orders) Central Rules, 1946.
Fixed-term employment was earlier introduced by the NDA government in
2003. Following protests by trade unions, the UPA government withdrew it in
2007. In 2015, then Labour and Employment Minister Bandaru Dattatreya
brought the proposal of fixed-term employment to the table again, but had to
withdraw it after stiff opposition from trade unions.
Terms of engagement
The notified Rules for fixed-term employment provide for equal work
hours, wages, allowances, and other benefits along with all statutory benefits
available to a permanent workman in proportion to the period of service
rendered by an individual, even if the period of employment does not extend to
the qualifying period of employment required in the statute.
However, no fixed-term workman shall be entitled to any notice or pay in
lieu, if his services are terminated as a result of non-renewal of contract or
employment.
Also, as per the Rules framed by
the government, no notice of termination
of employment shall be necessary in the case of temporary workmen, whether
monthly- rated, weekly-rated or piece-rated, and probationers or badli workmen
(workmen appointed in the position of permanent workmen or temporarily absent
probationers).
Views of industry and unions
Trade unions across the board have opposed the extension of fixed-term
employment to all sectors. The Rashtriya Swayamsevak Sangh-affiliated
Bharatiya Mazdoor Sangh (BMS) has asked for the notification to be withdrawn,
saying that none of its demands were accepted by the government. It said that
permanent employment will vanish from the industrial sector, all jobs will be
converted into temporary contract works for a fixed period only, and
hire-and-fire will become the legalised rule in the labour sector. The Communist Party
of India (Marxist)-affiliated Centre of Indian Trade Unions (CITU) has
called for a nationwide strike on April 2 to protest against fixed-term
employment.
The industry has, however, welcomed the decision. Ficci has said
that the government’s move to extend the facility of hiring workers on a
fixed-term basis to all sectors will trigger employment generation. The body
has added that the Rules will help
companies to employ people for a fixed duration for which they have orders or
assignments, and there will be no burden of carrying extra labour force during
the lean season.
Credit: Indian Express Explained
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