Fixed-term labour on the cards

Labour ministry's draft notification envisages labourers only for a mutually-agreed term

The labour ministry has issued a draft notification which says industries across the country can hire labourers for a mutually-agreed term and retrench them at the end of the period.

However to ensure labourers' welfare, the ministry has mandated that the terms of severance should ensure adequate compensation such as medical and other terminal benefits.

If the ministry is able to push through the notification, it will be possible to hire labour on fixed-term contracts in a few months.

While the special economic zones (SEZs), that are coming up in the country, will be the first beneficiaries of the move, other industries also stand to gain.

The notification will be issued under the Standing Orders of the Industrial Disputes Act.

All classes of labour, covered under the Industrial Disputes Act, will be affected by the changes.

The notification, therefore, is expected to be more useful for industry than the proposed changes in the Contract Labour Act, which is being deliberated by a group of ministers (GOM).

While the GOM will allow employment of contract labour in the non-core activities of any company, the proposed notification will actually serve a more useful role.

It has sidestepped the question of classifying labour as on contract or otherwise, by treating them as on fixed-term employment. This would mean that companies can hire the labourers for a fixed tenure, without mediation by a contractor or an outsourcing agent.

The draft notification on the subject was issued by the ministry to elicit reaction from the concerned section. Since the window period of 45 days time, given to the industry, trade unions and other interest groups, is over, ministry officials said they would issue the notification incorporating the changes soon.

Meanwhile, to give a leg up to the proposed SEZ in Positra, Gujarat has obtained a sanction from the labour ministry to allow fixed-term employment without having to wait for the general notification for the rest of the country.

Easing the contract rules

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Labourers can be retrenched at the end of the contract period

To ensure labourers' welfare, the ministry has mandated adequate compensation such as medical and other terminal benefits

Special economic zones will be the first beneficiaries of the move. Other industries also stand to gain

Notification expected to be more useful for industry than the proposed changes in the Contract Labour Act