More reports on: Government policies

Govt introduces `fixed-term' employment in apparels manufacturing

08 October 2016

The labour ministry has introduced a `Fixed Term Employment' scheme in the  apparel manufacturing sector where business is mostly seasonal in nature even while ensuring working conditions, including wages and other benefits on a par with regular employees.

The fixed-term employment in the apparel manufacturing sector, introduced through a notification in the Industrial Employment (Standing Order ) Act, on Friday (7 October 2016), would facilitate employment of workers in apparel manufacturing on fixed term basis, a labour ministry release stated.

Fixed term employment is 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 will not, however, be construed as termination of employment.

According to the ministry notification, the objective for permitting fixed term employment in apparel manufacturing sector is the seasonal nature of textile sector, which results in fluctuation of demand and hence requires flexibility in employing worker.

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.

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.

The employer can directly hire a worker for a fixed term without mediation of any contractor.

The worker employed for short period will get better working and service conditions as compared to a contract worker.

The fixed-term employment scheme would provide flexibility to textile sector in employing workers and hence strengthen and empower the textile and apparel sector in India.

This is one of the measures of the approved package for the textile sector. The measures assume significance due also to its potential for social transformation through women empowerment; since 70 per cent of the workforce in the garment industry are women, majority of the new jobs created are likely to go to women.

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 the 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.

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.

This, according to the ministry, is a win-win situation for both employers and employees in the apparel manufacturing sector.

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 as permanent, temporary, apprentice, casual, probationer and badlis.
The nature of industrial establishments may be a factor to decide the classification of the workmen. These include seasonal nature of the establishment or intermittent working 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.

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