Labour and Employment Minister Santosh Kumar Gangwar on Monday said that the industry should use fixed-term contracts to provide jobs to workers, mostly for short-term projects or seasonal work.
“By giving an option of fixed-term employment (in the new labour codes), we have given a flexibility to the industry and I am confident that such contract will mostly be used by businesses of short duration and of seasonal nature,” Gangwar said in his address at the All India Organisation of Employers’ 86th annual general meeting held through videoconferencing.
“You would believe more than me on the fact that an employee, if attached and involved with an industry for a longer duration, is more productive for the growth of that industry,” the minister said, while highlighting the importance of allowing a fixed-term contract system in the labour laws. He said the attrition cost of a skilled worker also harms the industry in the longer run.
The Industrial Relations Code, 2020, has a provision allowing industries to employ workers on a fixed-term contract. This was meant to help industries in hiring such workers for seasonal jobs or for short-term projects. Right now, industries hire contract workers through contractors, seen as a cumbersome and time-consuming process.
Fixed-term contract workers will be entitled to all the same benefits as regular employees in the establishment, except retrenchment compensation. Gangwar said companies that engage in seasonal work or get work order for a short period of time often engage casual or informal workers to get their job done. “This is a loss for workers, apart from them getting exploited,” the minister emphasised.
The minister’s comments came a day after Business Standard reported how the Industrial Relations Code, 2020, empowers the industries to convert existing workforce into fixed-term contract employees as the government removed a safeguard, which was there in its March 2018 notification, that deterred companies from doing so. Fixed-term employment, when it was a part of the central government's rules, was meant for new recruitments.
The government decided to introduce fixed-term employment in the law as it was only able to make it effective for a few industries (part of the central sphere).