Both outsourcing and engaging employees for fixed period with a Fixed Term Contract are illegal due to various reasons. The employees are in to your sales function and this function is very much a perennial function which can be carried out by employing full time employees regularly and as such you cannot have contract labour in that function. Sales involves high degree of personal relationship. Sales team will directly report to the company's prime persons. No compromise is possible in this function. An outsourced person cannot take a decision by himself as he is 'expected to be' working without direct supervision by the company officials. As such outsourcing is no way a remedy for this.
Coming to FTC or Fixed Term Contract, I would say that a contract of employment is always continuous unless it is for a particular project or time. It is okay if you give FTC appointment to an employee or some employees who are engaged in a particular project which is expected to be over in a certain time period. Once the project is completed the employment contract will get terminated automatically and without any notice or compensation the employee should leave the company. But sales is not like this. It is not for a fixed period. It will come to an end only when the company is wound up. Therefore, engaging sales team on FTC is not legally possible. Remember that engaging employees for long time on such contract is an unfair practice under the Industrial Disputes Act.
Now coming to practical scenario, you can see MNCs engaging employees in core areas of operation through contractors. Almost all big players do this. That has created a lot of aggrieved, disgruntled work force also and in many cases this has resulted in disputes, violence and murder of Personnel/ HR Managers!! (poor guys who implement the management policy and decisions!)
There have been a lot of FTC requirements in these new generation companies. Very strictly this practice is minimum wherever Trade Unions are strong.
Madhu T K