Q. Consider the following statements: As per the Industrial Employment (Standing Orders) Central (Amendment) Rules, 2018

  1. If rules for fixed-term employment are implemented, it becomes easier for the firms/companies to lay off workers
  2. No notice of termination of employment shall be necessary in the case of temporary workman.

Which of the statements given above is/are correct?

  • 1 only
  • 2 only
  • Both 1 and 2
  • Neither 1 nor 2

Answer: (c) Both 1 and 2

Notes:
  • The government has notified fixed-term employment for all sectors through an amendment to the Industrial Employment (Standing Orders) Central Rules, 1946.
  • Fixed-term employment for all sectors will make it easier for companies to hire-and-fire workers along with reducing the role of middlemen.
  • As per the Industrial Employment (Standing Orders) Central (Amendment) Rules, 2018, 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”.
  • No notice of termination of employment shall be necessary in the case of a temporary workman whether monthly rated, weekly rated or piece rated and probationers or badli workmen.
Industrial Employment (Standing Orders) Central (Amendment) Rules, 2018
  • The Ministry of Labour and Employment recently notified fixed term employment for all sectors.
  • It was through an amendment to the Industrial Employment (Standing Orders) Central Rules, 1946.
  • Highlights of the rules:
    • A fixed term employment workman is engaged on the basis of a written contract of employment for a fixed period.
    • The existing permanent workmen as on March 16, 2018 cannot be converted as fixed term employment thereafter.
    • March 16 is the date of commencement of the amended rules.
    • The notified rules provide for equal work hours, wages, allowances and other benefits as that of a permanent workman.
    • These are along with all statutory benefits available to a permanent workman proportionately according to the period of service.
    • This will be available even if the period of employment does not extend to the qualifying period of employment required in the statute.
    • Fixed-term employees whose services are terminated on non-renewal of contract or on its expiry is not entitled to any notice or pay in lieu.
    • No notice of termination of employment shall be necessary in the case of temporary workman.
    • This is whether it is monthly rated, weekly rated or piece rated and probationers or badli workmen (appointed in the position of permanent workmen or temporarily absent probationers).
  • Expected benefits:
    • The Cabinet had earlier approved fixed-term employment for specific sectors.
    • Fixed-term employment for all sectors now will make it easier for companies to hire-and-fire workers.
    • It will also reduce the role of middlemen and allow companies to hire workers based on seasonal trends.
    • The industries will be empowered to employ people for a fixed duration for which they have orders or assignments.
    • There will be no burden of carrying extra labour force during the lean season.
    • The move is further expected to promote ‘ease of doing business’.
  • Concerns:
    • Job creation – The move towards fixed-term employment will make it easier for companies to layoff workers.
      • This could have a bearing upon job creation in the country.
      • Notably, India’s unemployment rate is estimated to rise to 3.5% for 2018 from 3.4% estimated earlier.
    • Labour laws – The consolidation exercise of 44 central labour laws into four major codes is still pending by the government.
    • Trade Unions – Trade unions across the country have opposed the extension of fixed-term employment to all sectors.
    • This is because the move could lead to a situation where only fixed-term jobs are created.
    • There is a possibility that permanent employment would vanish from the industrial sector.