The Narendra Modi government has modified labour rules to encourage fixed tenure or contract jobs across all industries, signalling a shift in its employment generation strategy from job security to job creation.
The move is aimed at giving companies more flexibility in hiring employees and is expected to boost job creation. It will also help India climb the World Bank’s ease of doing business ranking as it removes restrictions on the firing of employees.
The changes, made through a gazette notification dated 16 March, come at a time when the government is looking to address the problem of jobless growth—a major political challenge for the government ahead of the general election due in 2019.
The new rules allow companies to hire workers on contract for a fixed term, extending the labour contract rules first introduced in 2016 for the textiles and apparel industry.
Accordingly, the gazette proposes to replace “fixed-term employment workmen in apparel manufacturing sector” in the Industrial Employment (Standing Orders) Central Rules, 1946, with “fixed-term employment”. According to the rules, no notice of termination will be needed, irrespective of whether workers are contracted for a month, week or the duration of a specific project.
Further, workers won’t be entitled to any notice pay if the contract is terminated.
The rules assure that pay parity and statutory benefits will be applicable to fixed-term contract workers. Fixed-term workers who have served for three consecutive months will get two weeks’ notice and those who have not will be informed of the reason for their retrenchment in writing.
To protect existing permanent workers, the rules provide that no employer will convert the posts of permanent workmen into fixed-term employment.
Source: Live Mint