News: Regular employees not to become contract workers: Govt

Employee Relations

Regular employees not to become contract workers: Govt

After the proposal of the draft Industrial Employment (Standing Orders) Central (Amendment) Rules 2018, the government is putting on its thinking cap to address the issue of probable misuse by the firms.
Regular employees not to become contract workers: Govt

During the presentation of the Budget 2018 in the Lok Sabha, the Finance Minister, Arun Jaitley had announced the proposal of a bill that would allow the firms to hire employees on a fixed term basis.

Now, the latest media report says that the government is making provisions to ensure that the executive order which shall come into effect in March will stop the businesses from converting their existing full-time employees into contract employees.

The move by the government to include the safeguard provisions was decided after a meeting on February 15th between the government, the representatives of 12 state governments, trade union, and industry.

On January 8th 2018, the labor and employment ministry had issued a draft Industrial Employment (Standing Orders) Central (Amendment) Rules 2018. The draft was made open for public comments for the next 30 days. As per the media reports, the reception has been mixed.

Currently, the industries in India hire contractual labor through contractors. As reported by the media, the process eventually leads to a hike of 25 per cent to the cost of hiring. After the introduction of the law, the benefit would actually pass on to the hired fixed-term employee and not the contractor. However, there are also dissenting voices in the market considering that even after the introduction of the fixed-term contract framework, the old system of hiring contractual employees through contractors will continue to exist, leading to confusion and lack of clarity.

The good news is that the workers hired through fixed-term employment law would enjoy the same benefits as the permanent employee, except that employers are not obligated to offer any retrenchment benefits to the workers.

The government is also thinking about putting a cap on the number of renewals for the fixed-term contract for the hired worker before he or she becomes a regular.

Though, the cap might also incentivize the employers to replace the workers. Despite the apprehensions, both the employees and the employers are looking forward to the reforms and also the consequent increase in employment in the country.

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Topics: Employee Relations, #Jobs

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