Legal Narrative
Abstract
In today's labor markets, fixed-term employment (FTE) is becoming more and more significant since it gives companies flexibility and gives employees legal protections. India's Four Labor Codes acknowledge FTE and aim to strike a balance between worker protection and flexibility. However, temporary contracts may create concern regarding renewal, continuity and long-term economic stability, particularly for women juggling employment with motherhood and care duties. This article examines FTE under Indian labour law, its tension between flexibility and precarity, and selected international approaches. It argues that while statutory parity protects workers, stronger regulation of repeated fixed-term contracts is needed to prevent flexibility from becoming structural insecurity.
Keywords: Fixed-Term Employment, Labour Codes, Precarity, Women Workers, Social Security, Employment Security
I. Introduction
Employment is increasingly moving beyond the traditional model of indefinite employment due to project-based work, seasonal needs and changing business requirements. Fixed-term employment (FTE) involves engagement through a written contract for a predetermined period. The Industrial Relations Code, 2020 recognises FTE and provides fixed-term workers wages and benefits comparable to permanent workers performing similar work. The Code on Social Security, 2020 also provides statutory protection, including gratuity.
However, the centre issue is the difference between equality and security of employment. For example, if X and Y perform the same work and receive the same salary, but X has a one-year contract while Y has permanent employment, both legal positions are not identical. X may enjoy wage parity during the contract but after that uncertain about employment its expiry. This uncertainty is the central idea of precarity in the context of Fixed term employment.
For women, employment insecurity may intersect with pregnancy, maternity, childcare and unpaid care work. The key question is whether flexibility can exist without creating disproportionate insecurity for workers.
II. Fixed term employment under the Four Labour Codes
The IR Code defines fixed-term employment as employment based on a written contract for a fixed period. It provides parity regarding hours of work, wages, allowances and other benefits with permanent workers performing the same or similar work. It also provides proportional statutory benefits and gratuity after one year of service under the contract.
Thus, the Codes recognise that being fixed-term should not make a worker into second-class employee.
III. Flexibility versus Precarity
Fixed-term employment serves legitimate needs such as project-based work, seasonal demand and temporary replacements. The ILO recognises its flexibility while cautioning against repeated use of fixed-term contracts for permanent work.
Illustration, A company hires a worker for one year to complete a specific project. The arrangement is understandable because the work itself has a foreseeable end. But if the same worker performs the company's ordinary permanent work and receives a series of short contracts year after year, the situation becomes different. The contract may be “temporary” on paper while the work is permanent in substance.This is where precarity emerges. Precarity does not simply mean low wages; it refers to insecurity surrounding the continuation of employment and the worker's future economic position.
Indian constitutional jurisprudence also supports protection against unequal treatment of temporary workers. In State of Punjab v. Jagjit Singh, the Supreme Court held that temporary employees performing the same duties and responsibilities as regular employees may claim the benefit of equal pay, with respect to conditions. The decision established the principle that the temporary character of employment cannot automatically justify inferior remuneration.
Similarly, Randhir Singh v. Union of India recognised the constitutional significance of the principle of equal pay for equal work. These cases are important because they demonstrate that labour flexibility cannot be used as a blanket justification for unequal treatment.
IV. Gendered Precarity: The Particular Position of Women
The gender dimension of FTE requires attention because maternity and care responsibilities may interrupt women’s employment. Repeated short-term contracts can make uncertainty over renewal more economically significant.
For instance, imagine a woman employed on a one-year contract who becomes pregnant near the end of that period, so the law may provide maternity-related protection, but her broader employment position still depends upon the contractual relationship and applicable legal safeguards. The concern is therefore not merely whether she receives a particular benefit, but whether temporary employment makes her more vulnerable to discontinuity or discriminatory decisions.
Article 42 of the Constitution directs the State to secure just and humane conditions of work and maternity relief. The Code on Social Security also provides a statutory framework for maternity-related benefits. Also formal entitlement must be supported by effective implementation.
Women may bear greater unpaid care responsibilities, making repeated short-term employment harder for career continuity, promotion and economic security. Thus, the effects of FTE can be gender-sensitive.
V. International Comparison
In the international level it shows that some legal systems place additional limits on repeated fixed-term employment.
The EU Framework Agreement on Fixed-Term Work, implemented through Directive 1999/70/EC, protects workers from less favourable treatment and abuse through successive fixed-term contracts. Member States may limit such contracts through objective reasons, maximum duration or renewal limits. The European Court of Justice has stressed that repeated fixed-term contracts require objective justification linked to the nature of the work.
The United Kingdom follows another protective mechanism. Fixed-term employees are generally entitled to treatment comparable to permanent employees, and after four years of continuous employment on one or successive fixed-term contracts, they normally become permanent unless the employer can establish a sufficient business justification.
India’s framework recognises FTE and provides benefit parity, but the IR Code does not set a general limit on successive contracts or their cumulative duration. This may allow repeated fixed-term employment over long periods, creating insecurity despite formal legal parity.
The international comparison therefore suggests one possible direction for Indian reform: preserve FTE where there is a genuine temporary need while introducing safeguards against indefinite reliance on successive short-term contracts.
VI. Way Forward
India need not eliminate FTE because flexibility can serve legitimate economic and employment purposes. Instead, regulation should distinguish genuine temporary employment from contractual arrangements that merely disguise continuing work.
- Employers should provide clear written contracts specifying duration, wages and statutory benefits.
- Repeated renewals should be subject to greater scrutiny where the worker continues to perform substantially permanent work.
- Effective remedies should be available against discrimination, retaliation and denial of statutory benefits.
- Maternity and social-security protections should be practically accessible to women in fixed-term employment.
India could also consider a framework requiring an objective justification for repeated renewals, drawing from comparative approaches under European law.
VII. Conclusion
Fixed-term employment is neither inherently exploitative nor fully secure. The Four Labour Codes strengthen worker protection by recognising FTE and providing statutory benefits. However, wage and benefit parity cannot eliminate insecurity arising from contract expiry and uncertain renewal.The experience of women highlights this limitation particularly clearly. Maternity, caregiving and workplace-safety concerns demonstrate that substantive equality requires more than identical contractual rights.
The appropriate objective is therefore not to choose between flexibility and security but to make flexibility compatible with security. India can achieve this by retaining legitimate fixed-term employment while placing stronger safeguards against repeated contractual insecurity. Ultimately, a worker should not have to surrender employment security merely because the employer requires flexibility.
FOOTNOTES
[1] Industrial Relations Code, No. 35 of 2020, § 2(o), India Code (2020).
[1] Code on Social Security, No. 36 of 2020, India Code (2020).
[1] Industrial Relations Code supra 1
[1] Id.
[1] State of Punjab v. Jagjit Singh, (2017) 1 S.C.C. 148. The Supreme Court has continued to apply the principle of equal pay to qualifying temporary employees
[1] Randhir Singh v. Union of India (1982) 1 S.C.C. 618
[1] INDIAN CONST. art.42
[1] Council Directive 1999/70/EC, 1999 O.J. (L 175) 43, annex (EC).
[1] Id.
[1] Adeneler v. Ellinikos Organismos Galaktos (ELOG), Case C-212/04, ECLI:EU:C:2006:443.
[1] Fixed-term Employees (Prevention of Less Favourable Treatment) Regulations 2002, SI 2002/2034, reg. 8; GOV.UK, Fixed-term employment contracts: Renewing or ending a fixed-term contract.
[1] International Labour Organization, EPLex: Fixed-term Contracts—India, noting that the IR Code does not prescribe a specific objective reason, maximum number of successive contracts, or maximum cumulative duration
