As per the new labour laws notified on September 29, the Industrial Relations (IR) Code, 2020, companies can now convert permanent jobs into fixed-term contracts.
The new guidelines have also permitted companies to hire contract workers directly through a fixed-term contract, which initially required companies to hire contract workers through a contractor.
No More Compensation Difference Between Contract-Workers and Fixed Employees
As mentioned above, according to the new labour law code of 2020, companies can omit the process of hiring fixed-term contract workers through a contractor.
This will cut the middle man process, which was seen as an expensive and cumbersome process.
Also, under the new labour law, such fixed-term contract workers will be given all the statutory dues received by any permanent employee of the company.
This is because the Union government has not put a limit on the number of times these contracts can be renewed (in their tenure).
However, these contract workers wouldn’t receive retrenchment compensation, unlike permanent employees.
Interesting Change for Permanent Employees
According to industry experts, by eliminating the dependence of companies on contractors to hire fixed-term contract workers, permanent jobs in the market will be looked down upon.
Under this enactment, contract workers will not only receive equal compensations as received by their permanent counterparts but also companies will hold the authority to hand out contractual jobs to their existing permanent workforce.
Earlier, according to (older) labour laws,
“no employer of an industrial establishment shall convert the posts of the permanent workmen existing in their industrial establishment, as fixed-term employment”.
Reacting to this development, Harpreet Saluja, President, National Information Technology Employees Senate (NITES) said, “Covid-19 lockdown a lot of State Government’s have already amended Labour laws which is reprehensible as the amendments are favorable for employers. Employees are the most affected part of the economy due to the coronavirus outbreak as they are at the receiving end.
The employees are already struggling with salary cuts and layoffs. The Government’s decision to allow layoff will degrade the life of employees & their families drastically. Under pandemic conditions it’s very difficult for employees to move out and search new jobs. In such difficult circumstances Government should take cognizance of humongous problems faced by workers and employees instead of protecting crony capitalists.”
We will keep you posted, as more details come in.
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