Recently according to the Niti Aayog’s recommendation, the Union Labour Ministry has issued a draft notice allowing fixed-term contracts across sectors. This also includes certain amendments to the Industrial Disputes Act. This is a remarkable move, and will definitely change how business functions within the country. If the draft is approved, then under the fixed-term contract workers will be entitled to the statuary benefits that are available to a permanent worker. But employers wouldn’t need to give a notice to fixed-term workers on expiry and non-renewal of contracts.
The Fixed-term Labour Contract
Till now such a contract was only seen in the Apparel Manufacturing sector. While the cabinet had said that it could be extended to other industries related to apparel, like footwear, etc. It was suggested that it be extended to all sectors. The fixed-term labor contract is a drastic change to the way labor would function in the country. But still awaits permission to be implemented and carried forward. The contract could potentially change the flow of labor as well as the job opportunities available.
Good or Bad?
Whether the change is good or bad, is yet to be decided. But one must understand who it will benefit in the end. The fact that the fixed term contract is even being considered, it means there are too many people waiting to be employed too few jobs. But that has always been the situation. While it ensures that one is hired more easily, the time limit is decided by the employer and that means uncertainty. In an era that depends on a certain kind of fixedness, this wouldn’t bode well. The employer meanwhile can be assured a continuous flow of labor. Therefore, who does this policy really benefit?
This law makes it easier to fire workers from jobs. It is also important to note that most BJP-ruled states are undertaking these reforms. States like Rajasthan, Madhya Pradesh, and Assam have amended the Industrial Disputes Act. Only time will tell how things play out in the economic field. The center especially following PM Narendra Modi’s Davos visit are pushing states to change reforms or tweak them at least.