Fixed term employment refers to workmen employed on a contractual basis for a fixed period of time. Herein, the services of the workmen stand terminated automatically after the expiry of the term. However, there is an option to renew the contract if both the concerned parties; i.e. the employer and the employee, decide to further work together. In case, the contract of employment is not renewed, the employee will not be allowed to provide his services further in the organization and the employer will not be under any obligation to pay remuneration once the contract period is over.
As per the Industrial Establishment (Standing Order) 1946, this facility was only available in the apparel manufacturing sector. However, in recent past, government has extended the facility of hiring workforce on fixed-term employment to all the sectors. It is an announcement made in the union budget lately. This step has been primarily taken in the light of flexibility required in hiring in order to facilitate business activity. This step would definitely contribute positively to the ease of doing business.
As far as amendment of the initially written order is concerned; the words, “fixed-term employment in apparel manufacturing sector” would be cancelled and will be replaced by “fixed-term employment”. With these updates, the order would clearly state that fixed-employment would be allowed in all the sectors.
As this order led to a rage and fear in trade union, the government gave in to the primary demand of the labor union by clarifying that as per this order no employer has the permission to convert permanent workforce into fixed-term. The government said that “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.” However, fixed-term worker will not be entitled to any notice or remuneration in lieu of termination of service.
The facility to hire fixed-term workmen in all sectors would give a boost to units that are seasonal in nature or those organizations that have fluctuating hiring demands. This order would give such industries the required flexibility in employing workers. More employment opportunities will be there as it will be a short term employment.
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We can conclude by saying that fixed-term workers will enjoy same benefits as a permanent workman. For instance, wages, hours of work, allowances, and other statutory benefits.