Fixed Term Employment Contracts In India

In any industry there may arise a situation where it becomes necessary for the employers to reduce the surplus work force due to the deteriorating profit margins, shortage of raw materials, accumulation of stocks, break-down of machinery etc. The reduction in work force is generally in the form of retrenchment. However, in order to protect workers against dismissals in the garb of retrenchment due process and conditions have been laid down under the Industrial Dispute Act, 1947 ("Act"). Further, the Act prohibits retrenchment of worker who has been in continuous service of one year unless the employer pays retrenchment compensation as well as fulfills other obligations stipulated in the Act.