Fixed-term Employees in Government PSUs: Can Long Service Lead to Permanent Status?

Can a fixed-term employee claim regularization as a permanent employee in a government PSU?

Can a fixed-term employee claim regularization as a permanent employee in any government PSU if he or she has worked with a government PSU for a longer duration, say 9 to 10 years? Also, if they receive all the benefits like PF, HRA, DA, Gratuity, etc.

Fixed-term employees and their benefits

A fixed-term employee is as good as a permanent employee. A fixed-term employee will receive all benefits, including statutory ones, that are given to a permanent employee.

Fixed-term employees and regularization

A fixed-term employee has no case for regularization. Fixed-term appointments, as the term indicates, are for a definite period, and there is no claim for permanent employment. The regularization of such employees is frowned upon by the Supreme Court as it goes against Articles 14, 16, etc., since other interested candidates for regular service could not apply and were not considered. These are known as backdoor appointments and are decried. (Ref: Secretary, State Of Karnataka And Another vs. Umadevi And Others, decided on 10 April 2006)

Thank you, sir, for the valuable feedback. I have another query: Does this judgment give liberty to companies to exploit people by keeping them on a fixed-term basis and taking advantage of them by posing threats that their tenure will not be reviewed if they have not performed as per their wishes? What is the limit of exploitation?

The Role of Fixed-Term Agreements (FTA) in Employment

There is no limit to the tenure fixed by law for FTAs. Indeed, FTAs are being seen as a new solution to the unemployment problem by affording employers more flexibility in recruiting additional labor. Yes, this can be exploitative, and many employers may resort to unethical practices under the cover of FTAs.

Employment for Fixed Term

Employment for fixed term should be allowed only for cases where the work is purely temporary. Though the recent amendment to the Standing Order Act permits such appointments across all industries, employing someone indefinitely for a long period, such as 9 years, can be questioned. It is true that upon termination of employment due to non-renewal of the contract, the employee will receive gratuity for the years of service. The issue is not with benefits but with the social and mental status the employee enjoys when on a fixed-term contract (FTC) versus permanent rolls.

Obviously, an employee under a contract for a few years, though renewable at the end of every year, will not be able to secure a loan from a bank nor will they receive a status equal to any other employee of that PSU. While amending the Standing Order Act, the government stated that all social security measures available to permanent employees will also be available to FTC employees. It is a fact that this is only an arrangement to provide employers with more flexibility in hiring and firing.

Challenges for Fixed-Term Employees

If a fixed-term employee (FTE) challenges a decision of the employer, they may not have their term extended further and will have to leave the premises. No one can back them or challenge their termination before any authority. However, if they fall under the purview of the Industrial Disputes (ID) Act, they can challenge the act of employing them for fixed terms as an unfair practice.