1. What is the concept of FTE?
A fixed term employment is a concept where a worker is engaged on the basis of a written contract for a fixed period of time. In such an employment arrangement, the tenure of employment is predetermined and the worker’s employment automatically comes to an end upon this predetermined tenure elapsing.
2. Who is fixed term employee as per the new Labour Codes?
As per the definition of ‘fixed term employment’ provided in Section 2(34) of the Social Security Code, 2020 and Section 2(o) of the Industrial Relations Code, 2020, a fixed term employee is a worker who is engaged on the basis of a written contract for a fixed period of time.
3. Is there any restriction that a FTE must be employed only in certain areas/ projects?
There is no statutory restriction on the areas or projects a fixed term employee can be employed in. Nevertheless, considering the jurisprudence, which has upheld temporary employees’ right to regularisation when the substantive nature of their roles and their continuous service is akin to permanent employees, it is recommended that fixed term employees only be employed for projects that are of temporary nature or to carry out specific tasks.
4. What are the conditions to appoint a FTE?
A fixed term employee must be appointed by way of a written contract specifying the tenure of employment. There are no further conditions for appointment.
5. Whether FTE can be treated as a regular employee?
A fixed term employee is statutorily required to be treated in the same manner as a regular employee. A fixed term employee is entitled to, at minimum, the same hours of work, wages, allowances and other benefits as a permanent worker doing either the same or similar work.
6. What are the benefits that an employee gets if he is appointed as FTE?
A fixed-term employee is accorded all the statutory benefits available to a permanent worker doing the same work or work of similar nature. These benefits shall accrue proportionately as per the period of service rendered by him, applying even if his period of employment does not extend to the qualifying period of employment required in the statute. Gratuity is the only exception, requiring at least one year of service for the fixed term employee to be eligible.
7. What is the minimum period of service that an employee needs to have for being eligible to gratuity?
A fixed term employee shall be eligible for gratuity upon rendering service under contract for a minimum period of one year.
8. Can the contract with FTE be extended or renewed for a further period?
There is no prohibition on extending or renewing fixed term employment. Nevertheless, such renewal or extension must be bona fide and not actuated by any improper motive. If motivated by unfair labour practices or any other improper motive, the renewal may result in the Courts requiring the employer to regularise such employees or treat them as permanent employees
9. Whether cessation of contract with an FTE will amount to retrenchment?
The cessation of contract with a fixed term employee due to completion of the tenure of fixed term employment will not amount to retrenchment since it is specifically excluded from the ambit of the definition of ‘retrenchment’ under Section 2(zh) of the Industrial Relations Code, 2020.
However, early termination of a fixed term employment contract by the employer for a reason other than punishment inflicted by way of disciplinary action may amount to retrenchment. In which case the conditions precedent to retrenchment, such as notice in writing, payment in lieu of notice and retrenchment compensation, would apply when the fixed term employee has actually worked under the employer for not less than 240 days in the preceding twelve months.\
10. Whether the FTE will have the right to be re-employed?
Unlike retrenched employees, fixed term employees shall not be accorded any preference over other persons in the case of re-employment as a right.
However, there is no prohibition on the re-employment of a fixed term employee. However, repeated re-employment with notional breaks in between in order to camouflage the true nature of employment may result in the Courts requiring the employer to regularise such employees or consider them as permanent employees.
