The Telegraph
Since 1st March, 1999
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Equal-benefit contracts

New Delhi, Oct. 16: The Centre has issued a notification for introducing fixed-term contractual employment in place of permanent jobs. The notification covers the public and private sector but not government jobs.

A labour ministry notification dated September 4 recommends amending the Industrial Employment Central Rules that allow employers to hire workers for a specific period, as per their requirements.

“The time period could be anything between six months to 10 years,” Union labour minister Sahib Singh Verma said. He added that contractual employment would benefit employers and employees alike. The notification will be in effect till October 22 so that various sections can tell them what they think of the proposal.

The move is part of the government’s agenda to usher in labour reforms. Under the amended rules, the employee’s wages, allowances and other benefits will not be less than that of a permanent worker.

“He will also be entitled to all statutory benefits like provident fund and gratuity available to permanent workers,” a labour ministry note says. It wants to incorporate a rule that will grant contract employees a wage hike of at least 25 per cent.

“We have been receiving applications from many quarters to introduce contractual employment in all the sectors. The employer should be able to pick the right worker for the right job,” Verma said.

He added that this would improve “work culture” and “productivity”. “If the worker wants to continue on the job, he or she will work better for better increments,” the minister said.

“The services of a temporary worker cannot be terminated as a punishment unless he has been given an opportunity to explain the charges of misconduct,” says the ministry note. It adds: “Employees, however, would not be entitled to a notice or pay in case their contracts are not renewed.”

Trade unions have opposed the proposal, saying it is an attempt to introduce a hire-and-fire policy through the back door. Labour leaders say they will oppose the amendments just as they are opposing amendments to the Contract Labour Act which is with the Group of Ministers for consideration at present.

Verma distinguished between contractual appointments and contract jobs. “In case of contract jobs, there are middlemen who hire the workers. In the case of contractual appointments, it is an agreement between the employer and the employee,” he said.

At a recent meeting, labour ministers from 25 states endorsed the amendments to the Contract Labour Act. They also suggested a separate fund be set up to provide a safety net for workers whose contracts have been terminated.

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