Fixed Term Employment : A Ticking Time Bomb

This entry is part 8 of 9 in the series IT Life II


Shyam Sundar who is a part of NDLF IT Employees Wing is having around 20 years of experience in information technology. He wrote an article series on “IT employees Life Fun or Problems” to create awareness about various issues faced by IT employees. This write up is eighth part of Series 2.

We were talking about various queries regarding how employees can legally get protection from layoffs in the previous parts. We will try to answer more commonly asked questions in this part

Fixed Term Employment

Fixed Term Employment – a time bomb for employment

Question 16:
I filed grievance petition under section 2A or 2K against the company. Conciliation proceedings are going on in labor office/labour court. In the meantime, I got a better offer. Will I able to withdraw the proceedings against the company in this case? Will I have problem in relieving formalities?

If both parties mutually agree, we can withdraw the case any time. Here the complaint is from employee. As employee requests to withdraw petition, this can be formally closed with the help of labor officer.

Management will be happy that one of the legal disputes against them is resolved. So chances of them creating issues is not there.

After all, the affected person is an employee of the company and management knows the employee side very well. Chances of their creating conflict is very less. We are dealing with top 100 companies of India and definitely they have professional approach in dealing with such cases.

Question 17:
I applied for 2A or 2K against the company. In the meantime, I got a better offer. I am looking for early release but my management is not agreeing for early release. They want me to serve the notice period. What I have to do in this case?

It is the employee’s responsibility to serve 2 months notice period. You can request for early release and if management agrees, you can get early relieving. If they refuse, you have to serve the notice period as per the terms and conditions.

Question 18:
Can I ask for severance package during the exit process? I am ready to quit if I get severance package

As I mentioned in the part about appraisal process, HR officers and managers involved are just facilitating the exit process and don’t have any authority to take decisions. Severance package decision should come from the top and if they had decided to provide severance, it will be put forth by HR team. So negotiation with HR team about severance package is of no use and it weakens your side. You should fight to retain the job, not for taking some compensation and leaving.

Question 19:
I have recorded conversations of all my appraisal discussions. I know political parties, media friends, senior police officers and lawyers. Can I complain against the company using these evidences?

First, understand that we are getting our bread and butter from the company. Here we are fighting for our rights and professionalism should be maintained at all levels. If we throw stones in a glass house where we live, we will also be affected.

I see many people record conversations and publish in social media. You will get attention for a few weeks and later it will fade away. Media people have many other interesting news to cover and layoff focus will get only a temporary importance. Courts will mostly not consider audio conversation as evidence. So don’t waste time in recording conversations as it does not yield any value. Avoid talking specifics against company in social media and stick to your point of protecting your job.

Question 20:
Can I declare that I joined unions like NDLF?

Every employee has the right to join labor union as per Indian constitution. Many large companies have policies to encourage employees joining union. In fact, ombudsman team should have representation from union. As unions are not prevalent in IT sector, it is filled only with management people. So declaring that you have joined union is not a mistake. You can definitely mention that, if you feel that it will save your job.


I hope this 20 Q&A gives insights into various queries you have in taking up legal fight and protecting your job during crisis situation. If you have further queries, post that in comments sections and I will try to answer.

A Time Bomb called Fixed Term Employment

We will now see about a recent bill which is under discussion allowing fixed term employment. Central government is trying to provide companies option to recruit regular employees based on contract agreement. Kerala workers showed their opposition against this bill strongly and they brought all industrial and commercial activities to standstill on 2nd April against the fixed term employment.

Fixed Term Employment

Kerala protest against Fixed Term Employment

We will first see what is fixed term employment.

The central government has allowed all companies to hire workers on contract basis for a fixed term — which could be anything from weeks to months — and fire them whenever they want, without giving notice or retrenchment pay.

Fixed-term employment was defined as a workman who is employed on a contractual basis for a fixed period. Thus the services of the workman will be automatically terminated as a result of non-renewal of the contract between the employer and the workman concerned.

Earlier it was introduced only in apparel manufacturing sector in October 2016.  In his Budget speech in February 2018, finance minister Arun Jaitley had said: “The facility of fixed-term employment will be extended to all sectors”.

After stiff opposition from the unions, the government has stipulated that this fixed term employment is only for new employees and companies cannot convert their permanent employees to fixed term contract.

We will see in detail what changes it will bring in IT sector, if fixed term employment put in to practice:

  1. This makes hire and fire legal. Companies can terminate employees without any legal hazard.
  2. Companies will recruit new employees under a contract which specifies duration of employment (several months). So the threat of job loss will always hang over the head of the employee that they will have no job at the end of the contract period.
  3. Management will force employee to work more hours, agree to organization policy changes and if anyone refuses, company will not extend contract and let the employee go.
  4. If employee demands higher salary, the company will end the contract and hire a new person with lesser wages.
  5. Salaried/wage workers are the second largest category in Indian population next to farmers. Fixed Term Employment will remove all labor rights and take us back to the early days of industrialization giving entire control to corporates.
  6. It affects the overall Indian economy badly.

Currently we have contractors in IT industry and percentage of contractors is very less. Companies can hire contractors only for short duration projects, say for less than 6 months, when they get sudden spike in work requirements. If any new employment opportunity arises in the organization, company should give preference to these contractors. Now with this new bill, they can hire contract workers even for longer duration projects and retain them by just extending the contract, only if the company wants.

The strike in Kerala is supported by employees working in IT sector also.  It is good to see that awareness is created among IT crowd on the issue.

Fixed Term Employment

Protest rally in Thiruvanandapuram against Fixed Term Employment

Some may ask how it affects us as this bill is only for newly joining employees. This is the way government infuses poison in sugar coated pill.

There is a famous story about a 80 years old man planting tree saplings. A person asked the old man, “it takes this tree atleast another 20 years to give benefits. Do you think you are going to live for another 20 years to reap the benefits?”

The old man replied “had our ancestors thought like that, we will not be reaping the benefits of available trees now. It is my responsibility to give the same service to the next generation.”

We are reaping the benefits from the trees planted by the previous generation of workers, in the shape of their fight for labour rights. It is our duty to to ensure the same is passed on to the next generation (including our children).

Even without Fixed Term Employment, newly joined people in IT sector face many new challenges. I list the various challenges which new IT employee face in recent times:

  1. Onsite opportunities reduced drastically as after Trump administration each company is insisting vendors to hire local people. So most of the companies are hiring US citizens and people from local origin for job placement onsite. Onsite benefit is the biggest factor which attracts employees to IT sector. Reduction in this opening will affect newly joining employees.
  2. Progression to higher levels becomes challenging. In early 2000s, there was a huge demand for Indian IT employees and all large companies increased employees count drastically every year.  As the bottom of the pyramid kept expanding, senior employees could move up. An employee with 5-7 years can easily become a project manager.
    But pyramid of IT employees is almost stagnant for the last few years. As a result progression to higher position becomes very difficult. Now a days, progression rate to project manager stage is only 2-5% on average.
  3. Salary Hikes percentage used to be in 2 digits during early 2000s but now on an average hike is only around 5% in most of the IT companies. This is less than the annual inflation rate.
  4. Number of engineering colleges has increased atleast by 5 times in the last 15 years. So getting a job is becoming very difficult for fresh graduates. As IT companies have a large pool of people availability, they don’t want to retain many senior employees and layoff above 35 become more common in many companies.

So if we allow fixed term employment to be implemented, it affects even the basic protections we have in our employment. We also demand that the government withdraw this bill considering various effects it is going to create on working population. Let us raise our voice for our future generations.

– Shyam Sundar

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