How Do Recent Labour Reforms Impact Fixed-Term Employment in Blue-Collar Jobs?

Fixed-term employment in the blue-collar sphere

Fixed-term employment is allowed in the blue-collar sphere of the contract staffing industry. The Industrial Employment (Standing Orders) Central (Amendment) Rules, 2018 (Rules) were notified by the Ministry of Labour and Employment through a notification dated 16 March 2018.

Labour reforms in fixed-term employment

Labour reforms have been introduced, permitting fixed-term employment across all sectors in the manufacturing field. The Industrial Employment (Standing Orders) Central Rules, 1946, have been amended by the notification. One condition introduced is that no existing permanent employees can be converted to fixed-term employees.

Definition of Fixed Term Employee

As per the definition of a Fixed Term Employee in the amended Industrial Employment (Standing Orders) Central Rules, 1946 — by Notification sub-para (h), a "fixed term employment workman" is a workman who has been engaged on the basis of a written contract of employment for a fixed period:

Provided that:
(a) His hours of work, wages, allowances, and other benefits shall not be less than those of a permanent workman.
(b) He shall be eligible for all statutory benefits available to a permanent workman proportionately according to the period of service rendered by him, even if his period of employment does not extend to the qualifying period of employment required in the statute.

Points to be Noted

1. There should be a written contract, i.e., either an appointment letter with the acceptance of the Fixed Term Employee or a Fixed Term Employment Agreement or Contract signed by both the employer and the Fixed Term Employee.

2. There should be a fixed period, i.e., a starting date and an end date in the written contract, i.e., either an appointment letter with the acceptance of the Fixed Term Employee or a Fixed Term Employment Agreement or Contract signed by both the employer and the Fixed Term Employee.

3. Hours of work, wages, allowances, and other benefits shall not be less than those of a permanent workman employed for the same job.

4. The Fixed Term Employee shall be eligible for all statutory benefits available to a permanent workman proportionately according to the period of service rendered by him, even if his period of employment does not extend to the qualifying period of employment required in the statute.

Regards, V.Sounder Rajan HR & Employment Law Attorney Specializing in Recruiting and Contract Staffing Industry M: [Phone Number Removed For Privacy-Reasons]