Temporary employment of daily wage workers - we need the freedom to relieve them after a period

We would like to employ a few persons on a temporary basis, for say 6 months, in our factory. We already employ 25 people on daily wages with all statutory requirements fulfilled. I understand that we need to pay EPF, which is acceptable. However, we need the freedom to relieve them after that period. Is this possible, and what is the procedure for the same.

Are they eligible for leaves and bonuses? Can we extend the employment for say another 6 months?

Can we give them a break for a few months and again employ them on a temporary basis if they are available, in case the need arises.

In short, we want temporary employment within the ambit of the law. The reason is that business is quite uncertain, and if we give permanent employment, it is difficult to remove anyone, irrespective of what anyone may say. We have seen examples of workers being removed due to non-attendance / non-performance but going on to file a case against the company and being reinstated with full back wages. We do not wish to get into such a mess in the future, and neither can we afford to employ people full time in such circumstances.

Dear HBJ,

If you have appointed them on a fixed-term contract, then all statutory compliances like PF, ESIC, and Bonus will be applicable. Yes, you can rehire them after the completion of the fixed-term services.

Dear @hr-revolution,

We have not yet appointed them as we are not aware of the procedure to do so. Can you please let me know how to make the contract in such a case? Are they eligible for leaves such as CL/PL, etc?

Dear HBJ,

What will be the nature of work for them? Kindly elaborate. If you hire them on a fixed-term employment contract, they will be eligible for all applicable leaves.

Dear @hr-revolution, the work is that of a simple machine operator and helper.

Thank you for your attention.

Employers have the option to keep employees rotating at intervals of 90 days as trainees. However, between two such employments, a minimum gap of 30 days should be maintained. If employees are recruited for a term of 6 months, they are still eligible to receive all standard benefits.

Dear HBJ,

It will be simple for a contract to be drafted by your legal team, mentioning the below points:

- Tenure
- Nature of work
- Termination clause
- Designation
- Remuneration
- Extension
- Working Hours
- Notice Period
- Code of Conduct (if applicable)
- Leaves & Holidays
- Rules & Regulations

For further queries, please feel free to email us at hr.revolutionservices@gmail.com.

@Glidor, thank you for the message. In case of a trainee, is PF/Bonus/Leaves/Gratuity applicable? Is 90 days the maximum, or can we consider it as 3 months, since June + July + Aug = 92 days? Or is it 90 working days? For how many years can such an arrangement continue? Do we need to provide a letter to the worker in a standard format?

@hr-revolution, thanks again. We are a small company in a small town and do not have a legal person or an HR expert in-house. Does the contract need to be on stamp paper or just our letterhead? Can you share the format for the same, as well as any sample letters if possible?

As mentioned in the original post, your establishment already has 25 employees, so the basic benefits of ESIC and EPF are automatically extended to all employees right from the date of joining.

On one side, your version is that your establishment is seasonal and may not have work for employees throughout the year, and on the other side, you seek an extension of their employment tenure. One cannot ride on two boats at a single time. You have to fix your time limit for temporary employees, and during the appointment, you have to clearly mention that the amount is CTC, including wages, bonus, and all other benefits.

The 90-day terminology is generally used as a maximum of three months, which should not exceed 26x3=78 days. However, one has to ensure that the same person does not continue in the attendance register for the 4th month. For example, if an employee joins on the 27th of January, and as a trainee, their full January is counted (wages are for a fraction of the month). January, February, March constitute the training span, and if they continue in April, they would become a regular employee of the establishment.

The maximum trainee span can be reduced but not increased. Another glitch that we have to address is if the same person returns after a few days and claims at the end of that time that they were on GRANTED leave for that period. In such cases, have replies ready to produce; otherwise, the breaks would not be valid, and the entire service would be counted end-to-end.

Gratuity is not applicable to trainees as their training period is too short, but once they become regular employees, the training period is also taken into account. For casual and seasonal workers, most establishments prefer to acquire manpower through contractors, which may cost a bit more, but all obligations remain with the contractor.

@Glidor, thank you for the detailed explanation. I will keep this in mind when making the decision.