Madhu.T.K
Industrial Relations And Labour Laws
STARNAND
Executive
Malikjs
Gm (hr)
Yawaris718
Pharmacist
+3 Others

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Apart from Section 2 (oo)(bb) Industrial Disputes Act, does anybody have any enactment which disables the lien on employment via repeated issue of fixed term contracts?
Also is there a stipulated period for the contract..Is it legal to have a FTC for 3 years, rather than 3 one year ftc's, to bye pass unfair labour practice?
Please also do comment on the policy in your organisation vis a vis recruiting as confirmed employee and on fixed term contracts.
also, are there differences in benefits, (or they treated the same) between confirmed staff and FTC employees.
Please do state the industry type, and what kind of staff you tend to recruit in which manner.
also please do make any other relevant remark on this issue.

From India, Kochi
only views? pl comment even if it is not applicable pl state that it does not apply in your org...thx...atleast we all will get a better perspective of practices across
From India, Kochi
dear joseph
first of all i would like to comment that whether your standing orders permit fixed term appointment.
suppose you have some project work than you can hire manpower on fixed term basis
but when you have regular work than why to hire on fixed term because you want
to adopt unfair labour practice.
dear due to this reason most of the states doesnot allow fixed term appointment.
tks
j s malik

From India, Delhi
There is hardly any difference between Fixed Time Contract employees and Confirmed employees. The contract of employment may go beyond 3 years also. But what is the benefit that the employer gets out of it? An employee who has worked for 240 days in a year is presumed to have gained continuous service. If the contract is extended to a further period of 2 or 3 years and if he leaves the organisation after two years of such extended period, his total service will become 5 years and he will be eligible for Gratuity. There is no need to serve any letter stating that you have been regularised or confirmed in service. The continuity of service is decided after looking in to whether you have worked for at least 240 days in each year.

I feel that the treatment given with FTC is just to keep a feeling amoung the employees that they are subject to termination without notice sothat they will be forced to 'work' rather than indulge in trade union and other activities. They are also covered under EPF, ESI and other social security benefits available to other confirmed employees right from biginning. They are also eligible for notice if their services are to be terminated. They are also eligible for termination compensation @ 15 days pay for every completed year of service.

Regards,

Madhu.T.K

From India, Kannur
Dear Madhu,
Thank you very much for your response.
But isn't this the very fulcrum of the issue where you have stated "There is no need to serve any letter stating that you have been regularised or confirmed in service. The continuity of service is decided after looking in to whether you have worked for at least 240 days in each year."
If it is a contract of fixed term, then 240 days loses its validity??
regards
Joseph

From India, Kochi
In labour laws you cannot find any scope for FTC and FTC is only an arrangement by the employer. Therefore, even if you are appointed for a period of, say 3 years, after completion of one year with 240 days of work, you are suppose to get all benefits offered by various labour Acts. Only thing is that the day of discontinuance of service is the date mentioned in the contract and as such no further notice is required in case termination takes place on that date. The contract itself will be taken as intimation for termination. However, if the employer wants to terminate his service before the date mentioned in the contract becomes due, notice should be served and compensation should also be paid.

Most often the contract will bear a term that "service shall be terminated before the date mentioned herein without notice". Such condition may not find good as it lacks social justice. The very purpose of serving notice is to enable the employee to find an alternative employment. Similar is the case when employee is asked to serve notice before leaving the organisation.
Regards,

Madhu.T.K

From India, Kannur
Dear Madhu,

Excellent explanation.

But to take it further then, and I'm sure it will benefit all those viewing and not commenting :-).....you have said that

a) there can be no discrimination of leave and or other benefits to any category of employee who remains in service longer than 240 days. Being on contract doesn't justify or allow such discrimination.

b) The sole advantage of the FTC is to ensure that service may be discontinued without any other process on the date stipulated on the contract.

c) The reason for placing on contract must not be to deny employment to worker, but because the real nature of service is either seasonal or temporary.

What is your thought on the principle of the job itself being permanent but the persons ability to do it being short termed...say having a life of only 5 years or so?

For example the army retires soldiers at 35 or thereabouts?

Since the private sector doesn't have that provision, I am of the opinion many employers have now chosen or hoping to choose the FTC option.

Statistics say that across India, the percentage of contractual relationships with employees across industries have gone up by more than 20% in the last five years.

regards

Joseph

From India, Kochi
As stated earlier, if the job is permanent the person doing the job should also be permanent. But there may be cases where the ability to perform the job ceases after 5 or 10 years. In such cases, since the employee had contributed his good resources during this 5 or 10 years for the exclusive benefit of the employer, the employer should take care of the employee while he leaves the organisation after having become 'stale'. It shall be read as the resources of the employee have been fully drained out due to his employment with the organisation. Therefore, the amount which employer should give shall only be a compensation or a kind of indemnity. In Defence Service, short serviced personnels are treated very good even after their retirement. In private sector though it is not practical to bring about a consensus to pay such benefits, initiative shall be made to open up the real story. In fact, it brings about motivation to work if employees are given an impression that they belong to one family under the organisation. I don't think that trade unions are aware of these whereas they go behind 'demands' for 'regularisation' of service and wage hike only.

Regards,

Madhu.T.K

From India, Kannur
True.
Yet that is not legal either.....even if we pre agree on a severance amount at the end of period of 5 years or more?
or how do you mean it? If the employee has been there 5 years in any case gratuity is applicable.
what is the other severance comp that you were referring to?
regards
Joseph

From India, Kochi
Even if the FTC specifies an amount payable at the end of 5 years of service the same cannot be construed as gratuity but it will be taken only as a pre agreed lumpsum amount. In such cases, if the employee is leaving after 5 years of service, he needs to be paid gratuity @ 15 days pay for every year of service. The former will not be taken as gratuity unless the amount is equal to the sum calculated under the Gratuity Act. And if, after accepting the lump sum amount (pre agreed in the FTC) the employee submits form I for getting gratuity, the employer may be forced to pay it.

If suppose his service is continued by the employer- means he has been terminated- he has to be paid retrenchment compensation which will be 15 days pay for every year of service. This is in addition to the amount payable by way of gratuity. Retrenchment compensation has to be paid irrespective of service whereas gratuity is payable only if he has at least 5 years of continuous service. If his service is discontinued before the date mentioned in the contract, naturally, payment in lieu of notice should also be paid. These are the other benefits due to an employee under the ID Act in which there is no reference is made about FTC.

Regards,

Madhu.T.K

From India, Kannur

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