Fixed Term Employment

Fixed-term employment is a contract in which a company or an enterprise hires an employee for a specific period of time.

Features:

  • In most case it is for a year but can be renewed after the term expires depending on the requirement.
  • In a fixed-term employment, the employee is not on the payroll of the company.
  • The services of workmanwill be automatically terminated as a result of non renewal of the contract between the employer and the workman concerne
  • A separation of service of a workman as a result of non renewal of the contract of employment between the employer and workman concerned shall not be construed as termination of employment.
  • Worker would not be entitled to any notice or pay in lieu of that, if his services are terminated or in case of non-renewable of contract or expiry of term of

The fixed term employment was introduced in apparel manufacturing sector in Industrial Employment (Standing Order) Act in October, 2016. The government has extended the facility of hiring workers on fixed term employment to all sectors for improving the ease of doing business for players intending to hire people for completing specified projects, tasks or orders through an amendment. The amendment also provides for

  • No notice of termination of employment shall be necessary in case of temporary and badli workmen.
  • A temporary workmen who has completed three months of continuous service, shall be given two weeks’ notice of the intention to terminate his employment if such termination is not in accordance with the terms of the contract.
  • In case he has not completed three months of continuous service, he shall be informed for the reasons for termination in writing.
  • The fixedworker would be entitled to all benefits like wages, hours of work, allowances and others statutory benefits, not less than permanent workmen.

This facility will aid industry to employ worker in sector which are of seasonal nature and witness fluctuation of demand and hence requires flexibility in employing worker. It is good step towards labour reforms. [THBL]

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