Now employer can change permanent employees in to contract employee - a point of worry for most permanent employees. Is this true?

The thread starter has aimed at Fixed Term Contract and not contract labour, I presume. The apprehension was whether the permanent workers be converted into fixed term contract workers?The answer is No. That was what given in the notification issued some two years back when the Govt issued notification allowing FTC employment across industries and amending the Standing Orders Act. The notification (GSR 235(E) dated 16-3-2018 in clause 3 has provided for amendment rule 3 of Industrial Establishment (Standing Order) Rules by inserting section 3A as follows:

"No employer of an industrial establishment shall convert the posts of the permanent workmen existing in his industrial establishment on the date of commencement of the Industrial Employment (Standing Orders) Central (Amendment) Rules, 2018 as fixed term employment thereafter"

However, when the bargaining power of employees become less the permanent workers may have to accept any offer given by their employers. Fixed term Employment per se is an attempt to make the labour market more elastic. For an employer it is not the EPF,ESI or gratuity which is hindering his decision to HIRE people but the permanency or the 240 days clause or the restrictions for FIRING that disallow him to hire people. When you have option to hire people for one year, he will hire and fire him if not fit or if he is found "anti employer" in attitude. He is okay with contributions like PF or even Gratuity. If he can terminate an employee without undergoing the formalities of retrenchment that gives a lot of relief and that is what is called 'ease of doing business' ! FTE gives the employe a flexibility. If the employee is not okay the maximum the employer has to do is o keep him till the period ends. Then his contract will not be renewed and obviously, the employee has to go.

India has a secular economy and it will be very difficult for a permenant employee to work under contractor. In general lots of dominant factors will be visible as of now atleast employers were aware that these employees are perminant and cannot be sacked so easily, however now for small reasons or arguments they can take action. India cannot be compared with other states or international bodies as there the salary & wage scale is too much higher as compared to India. Now only skilled employees and educated employees can only survive others will have to hunt for jobs or beg for their livelihood. Situation is going to be too crusual as lots of unemployment and burglary will increase. India will go on back foot after making this bill in effective stage.

DearDeenajag sir
Under All labour enactments all such benefits of Bonus Gratuity minimum wage principal Employers liability for safety of all workers irrespective of temporary permanent contract daily trainee etc in payments salary pf ESIbenefits are as usual with permanent employees the only difference is contract employees are monitored by a contractor authorized by Principal employer with the prior Approval of Govt of India and states level LabouLabour Depts.
Where as Permanent employees are directly monitor Ed by company itself by managerial cadres.
Manager s do the same monitoring through the contractors on contract labour.
For Contract labour Employees All Labour laws are one and the same of Employees compensation Act (W.C.) Act
Industry Dispute s Act equally applicable as usual same with Regular permanent employees . Ok

The gist of the question is whether the new Labour Code will accelerate the conversion of permanent jobs to that of contractual jobs lasting for a fixed period. The answer is an inevitable ' YES ' only.

At the outset, I would like to answer the three questions raised by Mr.Deenajag.
1) It is the common practice across all the industries that the contract labor are paid only the minimum bonus of 8.33%. It is going to continue
the same as bonus is taken out of the definition of wages under the Codes.
2) FTC employees are going to get gratuity proportionate to their length of service. It would be equally applicable to contract labor also.
3) The PE is responsible to such welfare amenities and other statutory periodical dues.

Regarding contractualisation of permanent jobs, it would be in a phased manner only as opined by some of the friends. The amendment to the rule of the Standing Orders Act pointed out by Mr.Madhu had a protective clause to keep the ratio of the FTE at a level to the cadre strength of permanent positions. The conspicuous absence of such a clause in the Code actually instills fear psychosis in the minds of all.

The gradual universal change in the pattern of employment highlighted by Mr.Vinayak and counter argument advanced by Mr.Dinesh Ahuja based on Indian situation are equally plausible.

Anyway, I hope that the working of the Codes over a period of time will certainly necessitate bringing of appropriate amendments.

Dear Mr Umakanthan.M, Dear Mr. Gannahope, Dear Mr. Madhu - Many thanks for your replies and insights.

Deenajag sir thank you.
Please note that
Any employee engaged by the employer or manager or through a representative like a contractor that employee joined just an hour ago he has every
protection from all Labour Acts when the issue of safety... When he may work within the premises of the company or if engaged to do out side work of the company like marketing or bringing or delivering any material in far away place or nearby pace..or even doing as per temporararily instructed by superior doing ...take it as granted all safety laws applicable to him.

Coming again to the fear of scot-free conversion of permanent jobs to that of FTE Contracts in the long run, the Standing Committee recommended certain limitations on the FTE Contracts like limiting the period of contract to a maximum of three years including extensions. But this issue was not only not addressed but also the restrictive clause in the amended provision of the standing order rule was done away. For instance Italy has limited this FTC arrangement only to a maximum of 20% of the total no of permanent jobs. The drafting of the Rules is said to have been entrusted to a panel of external experts. Let us wait and see any thing comes out from the Rules.

In country like India where rules are made and amended for the benefit of employers you cannot expect any change in it. In my opinion, we should have a balance between investment and welfare of workers but this is a kind of legislation which aims at investment (attracting investments) at the cost of health, safety and welfare of workers. It appears that investors did not come to India just due to labour laws and its restrictive clauses relating to retrenchment. I am afraid even in the present scenario no employer retrenches his employees and everyone follows the rules relating to safety, health and welfare of his workers!

The saving cl in the amendments to SO central rule of 16th March 2018,is deleted in the IR Code 2020. This shows the changed intention of the legislature /Govt.
In many countries where FTE is allowed there is cap on number of times a person can be on FTE.Actually fixed term contract was already in sec 2(oo) of ID Act.
Varghese Mathew