Fixed Term Jobs: Modi Govt. Gives “Hire & Fire” Freedom

Last week, the Labour Ministry issued a gazette notification amending a key law and bringing in a new provision that allows employers in any sector of industry to hire workers on a “contract of employment for a fixed term”. In plain English this means that employers can hire a worker for say three months or six months or whatever. After the duration is over, the employment is over. If the employer wants, he/she can again employ the worker – or not.

With this, the Modi sarkar has moved several steps forward towards the holy grail of all industrialists and other big employers – right of free hire and fire. Workers unions had opposed such a right resolutely for decades, but successive govts. had been trying to push it into the statutes as resolutely.

In 2003, the previous BJP govt. under Atal Bihari Vajpayee had allowed fixed-term workers. After widespread protests, it was scrapped in 2007 by the UPA govt. Now, the BJP govt. has again brought it in after first mooting the idea in 2015.

The change has technically been eased into statute books by amending rules issues under the Industrial Employment (Standing Orders) Act (1946). These rules are applicable for the central sector and for enterprises employing 100 or more workers. Till the amendment, fixed term workers or contract workers were permitted only in apparel industry, a concession granted only in 2016 under pressure from the apparel export industry. With the latest notification, the facility has been extended to all types of employment.

The move has been welcomed by industrialists and their lobby groups as being part of “ease of doing business”. FICCI has said that this move will “trigger job creation”. It is bizarre that a move that snatches away the right to job security is hailed by industrialists as a job creation devise – but then, this is the prevalent way of analyzing things. The logic of FICCI seems to be that workers will be free to move from job to job, always seeking (and getting) better ones while employers will get more freedom to hire when needed, as opposed to not hiring at all.

However, in India (and indeed across the world) short term contractual employment is on the rise as is unemployment. As per latest CMIE data, joblessness stood at about 7% of the workforce while the labour participation rate itself has shrunk in the past two years, indicating a dire crisis of jobs. So, what FICCI and others are saying is just a cover for their true reason for feeling so happy – the new rules allow them to squeeze workers further by employing them for shorter periods, perhaps following the production orders cycle. This will save the employers a lot of cost, and improve their profit margins.

Trade unions across the country have strongly opposed the new rules and vowed to fight back till they are scrapped.

“We have been consistently resisting this government’s continuous bid to destroy the labour sector. But they are hell bent. Through this notification they have now destroyed the concept of permanent employment,” said Tapan Sen, general secretary of CITU.

Even RSS affiliated trade union BMS was forced to issue a strong condemnation of the new rules saying that “hire and fire will become the legalised rule in the labour sector”. BMS also lambasted finance minister Arun Jaitley for violating ILO Convention 144 on Trade Union Consultation which was ratified by the Indian Parliament, when he unilaterally declared that the fixed-term employment will be implemented.

Trade Unions have also pointed out that since any overt amendment of the industrial laws would require scrutiny by Parliament and its committees, the govt. has adopted this backdoor method of changing rules through executive order.

Several state govt. run by the BJP, including Rajasthan, Maharashtra and Jharkhand have amended labour laws to create better conditions for employers severely damaging workers’ rights. However, four major ‘Codes’ proposed by the central govt. are still waiting in the wings as workers’ opposition has prevented their passage in Parliament. Ten central trade unions and dozens of other federations have held two major pan-Indian strikes and a 3-day mass sit-in at Delhi protesting against proposed labour law changes and other anti-worker policies of the Modi govt. in the past four years.