The Fixed Term Employment introduced in Apparel
Manufacturing sector in Industrial Employment (Standing Order ) Act vide
Notification dated 7.10.2016 of Ministry of Labour and Employment. The decision
would facilitate employment of workers in Apparel manufacturing on fixed term
basis in the backdrop of seasonal nature of sector and would also ensure same
working conditions, wages and other benefits for fixed term employee in the
sector as a regular employee. It is thus win - win situation for both employer's
and employees in Apparel manufacturing sector.
Fixed
Term Employment in Apparel and Manufacturing Sector
Introduction
·
The
Industrial Employment (Standing Orders) Act, 1946 require employers to define
conditions of employment in their industrial establishments. The item one of
the schedule to the Act classifies the workman (a) Permanent (b) Temporary (c)
Apprentice (d) Casual (e) Probationer (f) Badlis.
·
The
list in this schedule is not exhaustive. The nature of industrial
establishments may be a factor to decide the classification of the workmen.
Example:- a seasonal establishment, intermittent working establishment, work of
the establishment.
·
The
Central Government can add any other matter in the schedule and in the rules
under the powers given in section 15 of the Act.
·
Central
Government has presently proposed to introduce the concept of Fixed Term
Employment for workers in Apparel Manufacturing Sector. The pre-publication notification
for comments was issued on 04.08.2016 and was in public domain for 30 days i.e.
04.09.2016 followed by the consultations on 22-9-2016. The final notification
is issued today on 7th October 2016.
·
Concept - The concept
of Fixed Term Employment define the tenure of employment as well as other
associated conditions of service and remunerations, which are provided to
regular employees under various labour laws. Fixed term employment was defined
as a workman who is employed on a contract basis for a fixed period. Thus the
services of workman will be automatically terminated as a result of non renewal
of the contract between the employer and the workman concerned. 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.
·
Objective
for permitting Fixed Term Employment in Apparel Manufacturing Sector
1)
The
seasonal nature of Textile sector results in fluctuation of demand and hence requires
flexibility in employing worker.
2)
The
working conditions in terms of working hours, wages, allowances and other
statutory dues of a fixed term employee would be at par with permanent workmen.
3)
A
fixed term worker will also be eligible for all statutory benefits available to
a permanent workman proportionately according to the period of service rendered
by him even though his period of employment does not extend to the qualifying
period of employment required in the statute.
4) The employer can
directly hire a worker for a fixed term without mediation of any contractor.
5) The worker
employed for short period will get better working and service conditions as
compared to a contract worker.
6) The flexibility
would provide flexibility to textile sector in employing workers and hence
strengthen and empower the Indian Textile and Apparel sector. It is one of
the measures of the approved Textile package for Textile sector on 22.06.2016. .
The measures assume significance due also to its potential for social transformation
through women empowerment; since 70% of the workforce in the garment
industry are women, majority of the new jobs created are likely to go to
women.
·
Impact
of inclusion of the term - On the termination of fixed term
employment of the workman the workman is not entitled to any notice or pay in
lieu thereof. However, by proposed inclusion of the Fixed Term Workman as one
of the category of workman in the classification of workman in the Industrial
Employment (Standing Orders) Act, 1946 , the Ministry intends to make
such workman on fixed term employment eligible for all statutory benefits
available to permanent workman proportionately accordingly to the period of
service rendered by him. Even though his period of employment does not extend
to the qualifying period of employment required in the statute.
·
This
step would ultimately benefit the workers as their working conditions would be
at par with the regular employees including social security and other benefits.
It would, on the one hand provide flexibility to the employers and on the other
hand improve the working conditions of the workers already working for some
fixed tenure only by way of contracts.
·
It
would also provide prescribed format of contract for engaging workers on fixed
term employment, thereby avoiding any exploitation of such workers. The
inclusion in the IE (SO) Act would define formally the conditions of employment
on which the workman would be engaged for Fixed Term.
Conclusion
It
is a “win win” situation for both worker and employer as at on the one
side it provided flexibility for employing workers as per the demands of the
market and on the other hand it ensures that worker hired gets equal benefits
and working condition at par with the permanent employee.
****************
Incorporation of
Fixed Term Employment in Industrial Employment (Standing Orders) Act, 1946
·
Concept - The concept
fixed term employment define the tenure of employment as well as other
associated conditions of service and remunerations, which are provided to
regular employees under various labour laws. Fixed term employment was defined
as a workman who is employed on a contract basis for a fixed period. Thus the
services of workman will be automatically terminated as a result of non renewal
of the contract between the employer and the workman concerned. 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.
·
Objectives
of Inclusion of the term Fixed Term Employment –
·
To
provide flexibility to the employers in order to meet the challenges of
globalization, new practices and methods of doing businesses. The demand is
from those sectors where there is fluctuation in demand and hence variation in
demand of the labour accordingly. These seasonal demands have to be met with the
flexibility in operation to meet the dynamics of the market and hence inclusion
of the category of fixed term employment.
·
Presently,
as per Section 2 (bb)(oo) of the ID Act, the workers could be employed on
contract basis for some fixed time period and the removal of such workers on
termination of contract is not considered as retrenchment. Hence they are not
eligible for any notice period or retrenchment compensation as per the ID Act.
This indicates that there is an indirect provision of employment of workers for
a fixed term, however the service conditions of workers engaged for definite
period is not stipulated leading to different treatment for workers on fixed
term employment.
·
Impact
of inclusion of the term - On the termination of fixed term employment of
the workman the workman is not entitled to any notice or pay in lieu thereof.
However, by proposed inclusion of the Fixed Term Workman as one of the category
of workman in the classification of workman in the Industrial Employment
(Standing Orders) Act, 1946 , the Ministry intends to make such workman
on fixed term employment eligible for all statutory benefits available to
permanent workman proportionately accordingly to the period of service rendered
by him. Even though his period of employment does not extend to the qualifying
period of employment required in the statute.
·
This
step would ultimately benefit the workers as their working conditions would be
at par with the regular employees including social security and other benefits.
It would, on the one hand provide flexibility to the employers and on the other
hand improve the working conditions of the workers already working for some
fixed tenure only by way of contracts.
·
It
would also provide prescribed format of contract for engaging workers on fixed
term employment, thereby avoiding any exploitation of such workers. The
inclusion in the IE (SO) Act would define formally the conditions of employment
on which the workman would be engaged for Fixed Term.
Inclusion of
Fixed Term Workmen as classification of Workmen in IESO Act
·
The
Industrial Employment (Standing Orders) Act, 1946 require employers to define
conditions of employment in their industrial establishments. The item one of
the schedule to the Act classifies the workman (a) Permanent (b) Temporary (c)
Apprentice (d) Casual (e) Probationer (f) Badlis.
·
The
list in this schedule is not exhaustive. The nature of industrial
establishments may be a factor to decide the classification of the workmen.
Example:- a seasonal establishment, intermittent working establishment, work of
the establishment.
·
The
Central Government can add any other matter in the schedule and in the rules
under the powers given in section 15 of the Act. As per the powers under
Section 15, Central Government has presently proposed to introduce the concept
of Fixed Term Employment for workers in Apparel Manufacturing Sector. The draft
notification for comments has been issued on 04.08.2016 and would be in public
domain for 30 days i.e. 04.09.2016.
*******
AT/HS