Fixed Term Contract - Fresh Recruit

Dear all,
Our company is in to hospitality and majority of our F& B service employees are on FTC for 1 year.
The benefits and entitlemets for FTC employees remains the same as regular employees.
I seek clarification with reference to renewal of their contracts,
Can we issue them a renewal letter extending their contract or do we have to give them a break in their employment and consider them as fresh recruit, pls advice
Request the fraternity/ seniors to send me responses at the earliest.
You can also mail me on [IMG]https://www.citehr.com/misc.php?do=email_dev&email=c3VuaWxrMTA4QGdtYWlsLm NvbQ==[/IMG]
Regards,
SunilK

You can go ahead with renewal of contract without any break. There is no advantage that the company gets out of giving them break of one or two days. If the company aims at interrupting the continuity of service, then they should give work only for less than 240 days in a year.
Regards,
Madhu.T.K

Dear,
m agreed wirth Madhu Sir,
u can't do this to employees. Their benefits like leave, PF ESIC.
issue them renewal letter.
Regards
Vipin

Dear Sir,
Thank you for your quick response. I hope the letter of renewal of contract meets all the legal requirements as far as emploee and employer is concerned.
SunilK

Though you can renew the contract but it can be challenged in the court of law for permanent employment as renewal of contract tantamounts to the fact that a permanent vacancy exits in ur co. but u r intentionallly not hiring or filling the vacancy. There are case studies available on that.

Dear Gagan,
I have some clarifications with reference to your reply.
May I request you to leave your number or your email Id by which I can speak to you further.
Awaiting you response.
SunilK

Dear Sunil K,

Gaggan is right. Continued renewal of FTC, especially enmasse, may be questioned by authorities based on the premises that the nature of engagement is of permanent nature if such FTC-FTEs approach the legal fraternity for redressal. If nature of work is not of permanent nature (ie temporary type), any legal contention is untenable.

In traditional business sectors, FTCs are most often used for consultative, advisory or post-superannuated empanelment of professionals even though the likes of software industry (non-traditional sunrise) use it enmasse.

It makes little difference if you break service for 'employment-like' FTCs since statutory deductions (if applicable, depending on nature of FTC service agreement) willl need to be continued to be paid and continuity will be presumed for such 'employment-like' FTCs. Break in continuity in compliance such as PF, Gratuity, Bonus (if any) may be questioned. For such nature of engagements, as Mr.Madhu rightly advised (as always), break in continuous service (ie < 240 days) will be advisable.

For 'non-employment' like FTCs (note:terms of engagement will be different) compliances will not apply and hence you are comfortable either way (ie giving a gap or not makes virtually no difference, legally). Employers are not obligated to pay retiral/superannuation/SS benefits in such cases.

For any further advice, you would need to more specifically indicate the type/nature of FTC engagement, title and job description & terms of engagement to establish whether the nature of engagement is construed to be permanent or temp.

Rahul
09968270580
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