Consider the following statements: As per the Industrial Employment (S

Consider the following statements:
As per the Industrial Employment (Standing Orders) Central (Amendment) Rules, 2018

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1. if rules for fixed-term employment are implemented, it becomes easier for the firms/companies to lay off workers
2. no notice of termination of employment shall be necessary in case of temporary workman

Which of the statements given above is/are correct?

1 only

2 only

Both 1 and 2

Neither 1 nor 2

Answer is Right!

Answer is Wrong!

This question was previously asked in

UPSC IAS – 2019

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Statement 1 is correct.

Statement 1 is correct. The Industrial Employment (Standing Orders) Central (Amendment) Rules, 2018 (which led to insertion in model Standing Orders) introduced Fixed-Term Employment (FTE). A fixed-term workman is engaged for a fixed period. Upon expiry of the fixed term, the employment automatically terminates. This bypasses the requirement for following the formal retrenchment procedures under the Industrial Disputes Act, 1947 (like notice period or compensation based on service length) that would typically apply to permanent employees being laid off. Thus, for the employer, it is easier to end the employment at the conclusion of the term compared to laying off a permanent worker.

Statement 2 is incorrect. The rule introduced by the 2018 amendment regarding termination notice specifically states: “Provided that in case of a *fixed term workman*, no notice of termination of employment shall be necessary”. This rule applies to ‘fixed term workmen’, which is a specific category introduced by the amendment. The term ‘temporary workman’ under the Standing Orders might encompass different types of temporary arrangements, and the rules regarding notice for temporary workers can differ based on service duration and specific company Standing Orders (if certified). The statement uses the potentially broader term “temporary workman” while the amendment’s specific provision applies to the newly defined “fixed term workman”.

Fixed-Term Employment (FTE) was introduced to provide flexibility to employers to hire workers for specific projects or periods without the complexities of managing permanent staff when the project or period ends. FTE workers are entitled to the same wages, allowances, and other benefits as permanent workers doing the same work, but their employment ends automatically with the contract period.

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