AN INVESTIGATION ON THE TERMS AND CONDITIONS OF FIXED TERM EMPLOYEES IN INDIA. BY – P.DARSHAN KUMAR
AN INVESTIGATION ON THE TERMS AND
CONDITIONS OF FIXED TERM EMPLOYEES IN INDIA.
AUTHORED BY – P.DARSHAN KUMAR
Abstract:
This article gives a thorough examination
of the terms and conditions of temporary employment in India, focusing on the
legislative framework, the characteristics of temporary workers, the length of
the contracts, difficulties, and prospects for conversion to permanent
employment. The study emphasizes the significance of having a clear legal
framework that spells out the rights and responsibilities of fixed-term
employees, including the minimum contract length, notice requirements, and
benefit eligibility. It emphasizes the requirement for equitable treatment of
fixed-term and permanent employees, ensuring parity in benefits, educational
opportunities, and prospects for career advancement. The study highlights the
difficulties faced by fixed-term workers, such as job uncertainty, limited
benefits, and potential treatment inequities. The potential advantages of
converting to permanent employment are emphasized, including better job
security, access to benefits, and chances for professional growth.
Introduction to
fixed term employment in india
Fixed-term employment is a type of
employment when the agreement between the employer and the employee is tied to
a particular project or assignment or has a set end date. Fixed-term employment
(FTE) is a form of temporary work arrangement where an employee is hired for a
predetermined period of time. The rise of FTE in India can be traced back to
the liberalization of the economy in the 1990s, which led to the growth of the
service sector and the increasing need for flexible employment arrangements.
Today, FTE is prevalent in various sectors, including manufacturing, retail,
and information technology. Although FTE gives employers more flexibility and
gives people new options, it also raises questions about job security, social
security, and unjust exploitation of workers. India has passed a number of laws
and regulations controlling FTE in order to solve these issues, including the
Contract Labour (Regulation and Abolition) Act of 1970 and the Industrial
Employment (Standing Orders) Act of 1946. These laws provide forth rules for
FTE rights and responsibilities, including those related to working conditions,
pay, entitlement to leave, and termination of employment. Due to benefits
including labour management flexibility, cost effectiveness, and adaptability
to changing business needs, fixed-term employment has seen a major rise in
popularity in India over the past few years. Fixed-term employment allows
employers to hire workers for a predetermined amount of time, which is helpful
in industries with seasonal or project-based demands. Businesses may easily
hire and fire employees based on operational requirements, avoid long-term
employment commitments, and adjust their staff in reaction to workload
fluctuations thanks to this. Employees who work on a temporary basis can get
professional experience, be exposed to a variety of initiatives, and possibly
land a permanent position in the future. It might present opportunities for
professional development, income security for the term of the contract, and
networking. However, fixed-term employment raises concerns about worker
exploitation, a lack of social protection, and job stability. Fixed-term
employees may have contract renewal uncertainty, limited access to benefits and
rights, and susceptibility to unfair treatment when compared to permanent
employees. The legal framework and legislation governing fixed-term employment
in India have changed throughout time in order to strike a balance between
flexible employment practises and the preservation of employees' rights. The
Industrial Employment (Standing Orders) Act of 1946 and other labour
regulations give guidelines for fixed-term employment terms and conditions,
including those pertaining to notice requirements, termination procedures, benefits,
and non-discrimination. The purpose of this research study is to investigate
the nature and significance of fixed-term employment contracts. It will
specifically go through the rules and laws that regulate fixed-term contracts,
their advantages and disadvantages for both employers and employees, and the
best ways to negotiate and manage them. In the end, the paper will aid in a
better comprehension of the intricate dynamics of employment contracts and
offer organisations advice on how to manage this always changing environment.
Environment and
Regulatory Framework
The legal
framework and regulatory environment governing fixed-term employment in India
consist of various laws, acts, and regulations that provide guidelines and
protections for both employers and employees. These include:
·
The
Industrial Employment (Standing Orders) Act, 1946: This act regulates the terms
and conditions of employment, including fixed-term employment, in industrial
establishments. It requires employers to define and publicly display standing
orders that outline the rules and regulations governing employment, including
provisions related to fixed-term contracts.
·
The
Contract Labour (Regulation and Abolition) Act, 1970: This act regulates the
employment of contract laborers in establishments where the work is of a
perennial nature. It ensures that fixed-term employees employed through
contractors receive fair wages, working conditions, and social security
benefits.
·
The
Shops and Establishments Acts: Each state in India has its own Shops and
Establishments Act, which governs the working conditions, employment terms, and
benefits for employees in shops, commercial establishments, and service
sectors. These acts often include provisions related to fixed-term employment,
working hours, leave entitlements, and termination procedures.
·
The
Employees' Provident Funds and Miscellaneous Provisions Act, 1952: This act
establishes the Employees' Provident Fund Organization (EPFO) and mandates
employers to contribute to the provident fund for employees, including
fixed-term employees. It ensures the accumulation of a retirement fund for
employees.
·
The
Employees' State Insurance Act, 1948: This act establishes the Employees' State
Insurance Corporation (ESIC) and provides health insurance benefits and social
security coverage for employees, including fixed-term employees, in case of
sickness, disablement, maternity, and death.
·
Minimum
Wages Act, 1948: This act sets the minimum wage rates for different categories
of workers, including fixed-term employees. It ensures that workers receive
fair remuneration for their work.
·
The
Industrial Disputes Act, 1947: This act governs the resolution of industrial
disputes between employers and employees. It includes provisions related to
layoff, retrenchment, and termination of fixed-term employees, ensuring
compliance with due process and providing avenues for redressal.
It is essential for employers to adhere to
these legal provisions and comply with the prescribed terms and conditions to
ensure fair treatment and protection of fixed-term employees. Non-compliance
can lead to legal liabilities and disputes. The legal framework and regulatory
environment surrounding fixed-term employment in India are subject to periodic
amendments and updates. It is crucial for employers and employees to stay
updated with the relevant laws and regulations to ensure compliance and protect
their rights and interests.
Profile of
Fixed-Term Employees in India:
In India, there are many different types
of workers who operate in different businesses and sectors who are classified
as fixed-term employees (FTEs). FTEs are typically recruited for a
predetermined amount of time that is detailed in the employment contract.
The following are some essential traits of
India's fixed-term workers:
In India, fixed-term employees come from a
variety of educational and occupational backgrounds. They span the educational
and skill spectrum, from those with little schooling to highly qualified
professionals. Fixed-term employees are frequently employed in entry-level or
lower-paying positions and are typically younger than their permanent
counterparts. In several sectors, like the hotel and healthcare industries,
FTEs also tend to be more female-dominated. Depending on the position and the
industry, fixed-term employment in India might last anywhere from a few weeks
to a few years. FTEs may be used for unique demand changes, seasonal work, or
projects. Fixed-term workers could earn less money and be eligible for fewer
benefits than permanent workers. FTEs do, however, have legal rights to perks
like leave entitlements, ESI, and provident funds. The impermanent nature of
fixed-term work in India is frequently linked to job insecurity. FTEs might not
have the same job security or opportunity for professional development as
permanent workers. Employers have more flexibility with fixed-term employment
when it comes to recruiting and managing their personnel. Employers are able to
adapt their workforce to shifting market demands by using FTEs, which are often
engaged to satisfy short-term or unique business needs.In conclusion,
fixed-term workers in India are a broad collection of individuals with a range
of educational and professional backgrounds who frequently hold entry-level or
lower-paying jobs. FTEs are frequently hired temporarily to suit certain
company needs and may be paid less and offered fewer benefits than permanent
workers. Their employment may also be unstable due to its transient nature.
Government
initiatives for India's fixed-term employees
The Indian government has launched a
number of programmes and initiatives to offer social security and welfare
benefits to the nation's fixed-term employees (FTEs). The following are some of
the programmes and initiatives.
The Pradhan Mantri Shram PM-SYM Yogi
Maan-dhan For employees in the unorganised sector, including FTEs, the Indian
government has introduced a pension programme called PM-SYM. According to the
plan, FTEs can make contributions to their pension accounts and, after turning
60, will get a minimum guaranteed income of Rs. 3000 per month.
ESI, or Employee's State Insurance For
employees in the organised sector, there is a social security and health
insurance programme called ESI. FTEs must work for at least 78 days in a fiscal
year to qualify for ESI benefits. The programme offers FTEs health insurance,
sick pay, and disability benefits.
The Government of India introduced the
Pradhan Mantri Rojgar Protsahan Yojana (PMRPY) as a programme to reward
employers for creating jobs. Employers are rewarded under the plan for taking
on more workers and giving them social security benefits. FTEs are also
qualified for the program's perks.
The National Pension Scheme for Traders
and Self-Employed Persons is a pension programme for small business owners and
independent contractors, including FTEs. In accordance with the plan, FTEs can
make contributions to their pension account and, after turning 60, get a
regular pension.
By Atal Beemit Vyakti Kalyan Yojana
(ABVKY): For employees in the unorganised sector, including FTEs, ABVKY is an
unemployment insurance programme. The programme allows FTEs who lose their jobs
as a result of an establishment closing, layoffs, or permanent infirmity to
receive a monetary incentive for a maximum of two years. In order to provide
social security and welfare benefits to the country's fixed-term workers, the
Indian government has established a number of initiatives and projects. Some of
these schemes include pension plans, health insurance plans, unemployment
insurance plans, and employment creation plans. FTEs are eligible for these
benefits based on their payments to the plans and fulfilment of particular
eligibility requirements.
Employment Terms and Conditions:
Duration, Notice Period, and Renewal
The Industrial Employment (Standing
Orders) Act, 1946 and other pertinent labour regulations in India govern the
terms and conditions of employment for fixed-term workers. The following are
some of the important terms and conditions of employment for fixed-term
employees in India:
For fixed-term employees, the
duration of their employment is predetermined and outlined in their employment
contract. Depending on the type of work and the business, the time frame could
be ranging from a few weeks to a few years. In most cases, the employment
contract specifies the notice time for terminating a fixed-term job. The notice
period for termination of employment must be at least one week if the employee
has been employed for less than six months and at least two weeks if the
employee has been hired for more than six months, according to the Industrial
Employment (Standing Orders) Act of 1946. In India, the employer and the
employee may agree to renew a fixed-term work contract. The terms and
conditions of work should be included in the renewed contract if the employment
is extended. If the employee keeps working after the fixed-term contract
expires without a renewal, it can be seen as a de facto permanent position. Upon
contract expiration, either side may end a fixed-term employment agreement. The
employee should be given a notice period and remuneration in accordance with
the employment contract in the event of an early termination. According to the
applicable labour regulations, fixed-term employees are entitled to statutory
benefits such provident fund, ESI, and leave entitlements. However, they could
not be eligible for other benefits, like gratuities and pensions, that are
exclusively provided to long-term employees. A fixed-term employee's status as
a temporary employee should not be used as a foundation for discrimination. In
terms of working conditions, pay, and other perks, they ought to receive the
same treatment as regular employees. The duration of work, notice period,
renewal of employment, termination of employment, entitlements and benefits,
and non-discrimination are all included in the terms and conditions of
fixed-term employment in India. Statutory benefits are provided to fixed-term
employees, however they might not be eligible for all benefits offered to
permanent employees.
Case law:
In
Pramod Kumar Tiwari Vs. Hindustan Fertilizer Corporation Ltd,
the High Court of Madhya Pradesh opined that termination of a of a workman who
was appointed for a fixed term (and renewed thereafter) would not be covered by
retrenchment, as it fell under the exceptions stated in Section 2(oo)(bb) of
the Industrial Disputes Act. However, it is generally accepted that any person
who has been working for an employer for more than 7 years, albeit through
renewals and by way of fixed term contracts – would be interpreted as a
permanent worker, and such practice should be avoided. In a matter, a workman was appointed as a typist and
worked for roughly six years, his appointment was on temporary basis and he was
given breaks during the said term, after which his contract was again renewed.
The labour court ruled that he ought to be reinstated. While The Allahabad High
Court held that the labour court was wrong in logic, but nevertheless modified
the order and directed reinstatement of the typist as during the interim
period, other typists were appointed – which amounts to discrimination.
Industries that employ fixed-term
contracts:
Healthcare: To fill maternity leaves
or other temporary staffing needs, hospitals and healthcare institutions may
engage nurses, doctors, and other healthcare professionals on fixed-term
contracts.
Education: To fill vacations or to
temporarily teach a particular course, schools and universities may recruit
professors and teachers on fixed-term contracts.
Finance: To work on specific
projects or to fill employment shortfalls during peak times, banks and
financial institutions may hire consultants on fixed-term contracts.
Technology: Tech firms may employ
software engineers or developers on fixed-term contracts to work on particular
software development projects or to fill personnel gaps during busy times.
Manufacturing: To meet seasonal
demand or to complete special projects, manufacturing companies may recruit
production workers on fixed-term contracts. It's vital to remember that
fixed-term employment practises and the particular terms and circumstances of
these contracts can differ by industry and business. When recruiting fixed-term
personnel, businesses must make sure they abide by all applicable rules and
regulations.
Changing to Permanent Employment:
Opportunities and Challenges
In order to guarantee workers' job
security and stability, it is imperative that the question of the conversion of
fixed-term employment to permanent employment be resolved. Although employers
have more flexibility with fixed-term employment, it exposes workers to job
uncertainty and a lack of social safety. Converting to a permanent position
might offer financial stability, social security, and access to employee perks
like pension plans and health insurance. Conversion to permanent work, however,
is fraught with difficulties in India. The opposition from employers who favour
the flexibility provided by fixed-term employment is one of the major
obstacles. Conversion to permanent employment may be opposed by employers
because it would increase expenses, reduce flexibility, and subject them to
liability in the event of termination. The legislative framework's ambiguity
surrounding the transition from temporary to permanent employment presents
another obstacle. The lack of a clear framework in India's labour regulations
for converting fixed-term employment into permanent employment causes
misunderstandings and conflicts between companies and employees. Despite these
obstacles, there are ways to encourage the conversion of temporary work to
permanent work in India. For instance, the government may encourage firms to
turn temporary positions into permanent ones by offering tax breaks or other
financial incentives. This might persuade firms to turn temporary jobs into
permanent ones, giving workers more stability and employment security. Additionally,
trade unions and employee organizations may play a significant role in
promoting the rights of fixed-term workers and calling for their conversion to
permanent employment. Clear conversion policies that safeguard the interests of
both businesses and employees may be established through collective bargaining
and talks between employer and employee representatives. In order to provide
job security, social protection, and access to employee benefits in India, it
is critical to resolve the issue of the conversion of fixed-term work to
permanent employment. While there are obstacles to conversion, there are also
chances to support the transition from temporary to permanent employment. It is
significant to highlight that depending on the organisation, industry, and
regional labour laws, the precise advantages and benefits of conversion may
differ. However, in general, it is thought to be favourable for fixed-term
employees to convert from fixed-term to permanent employment because it gives
them more job stability, career chances, benefits, rights, and a sense of
loyalty to the company.
Conclusion: Improving Fixed-Term
Employee Rights
and Protections in India
In conclusion, strengthening
fixed-term workers' rights and safeguards in India is essential for fostering
equality, stability, and inclusion in the labour market. While fixed-term
employment gives companies flexibility, it can also provide problems and
worries for employees. We can create a more equitable and encouraging workplace
for fixed-term employees by addressing these challenges and putting in place
the necessary laws and regulations. It is critical to have a clear legal system
that spells out fixed-term employees' rights and obligations. This framework
should have clauses addressing notice requirements, minimum contract terms,
non-discrimination, and benefit access. We can guarantee that fixed-term
workers are treated fairly and feel secure in their jobs by setting these
standards. Equal treatment for both permanent and temporary employees is
crucial. For fixed-term employees, employers should offer equivalent perks,
training opportunities, and professional progression chances. This may aid in
closing the gap and presenting equitable possibilities for advancement. Opportunities
for converting from fixed-term to permanent employment should be openly
advertised and founded on just evaluation standards. The prerequisites for
conversion should be made plain to employees, encouraging a sense of justice
and consistency in their career advancement. The rights and protections of
fixed-term employees can also be improved by giving them access to social
security benefits, encouraging employment contract transparency, putting in
place grievance redressal procedures, and increasing awareness and education. These
actions can be taken to improve the environment for fixed-term workers in
India, making it more fair and hospitable.
Their general well-being, job
satisfaction, and long-term career prospects will all benefit from this. To
guarantee that these policies continue to be useful and applicable in the
changing workplace, collaboration among policymakers, companies, and employee
groups is crucial. The legislative framework, the profile of fixed-term
workers, the length and renewal of contracts, difficulties and worries, and the
possibility of converting to permanent employment have all been covered in this
paper's analysis of the terms and circumstances of fixed-term employment in
India. Numerous important conclusions have been drawn from this analysis.
