Permanent jobs can now be converted into fixed-term contracts under new labour laws: Report

Companies can now convert permanent jobs into fixed-term contracts as the union government removed safeguard provision under the new labour laws that were released last week, according to a report by Business Standard.

The Industrial Relations (IR) Code, 2020, which was notified on September 29, allows companies to hire contract workers directly through fixed-term contract. Earlier, firms had to go through a contractor to hire contract workers.

According to the report, fixed-term contract workers are entitled to all statutory dues that permanent workers in the same unit get. However, fixed-term contract workers are not entitled to retrenchment compensation like permanent employees.

Experts say that its introduction will lead to withering away of permanent jobs in the market, given the fact that the government has not placed any cap on the number of times such contracts can be renewed or on their tenure.

Under the current enactment, companies will be able to hand out contractual jobs to its existing permanent workforce as well. Earlier, the rules mentioned that “no employer of an industrial establishment shall convert the posts of the permanent workmen existing in their industrial establishment…as fixed-term employment”.