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Q60 (IAS/2019) Economy › Growth, Development, Poverty & Employment › Labour market regulations Official Key

Consider the following statements : As per the Industrial Employment (Standing Orders) Central (Amendment) Rules, 2018 1. if rules for fixed-term employment are implemented, it becomes easier for the firms/companies to lay off workers 2. no notice of termination of employment shall be necessary in the case of temporary workman Which of the statements given above is/are correct?

Result
Your answer: —  Âˇ  Correct: C
Explanation

The correct answer is option C because both statements are correct.

The Industrial Employment (Standing Orders) Central (Amendment) Rules, 2018 introduced the concept of "fixed-term employment" in all sectors[1]. These rules provided proportionate benefits for fixed-term employment workers, including gratuity after one year of service, without laying down the need for notice or retrenchment benefit on non-renewal of contract[2]. This makes Statement 1 correct, as the absence of notice or retrenchment benefit requirements on non-renewal makes it easier for firms to end employment relationships with fixed-term workers.

Statement 2 is also correct. The amendment explicitly states that "no notice of termination of employment shall be necessary in the case of temporary workman whether monthly rated, weekly rated or piece rated and[3] probationers or badli workmen". This provision directly exempts employers from giving termination notice to temporary workers.

Therefore, both statements accurately reflect the provisions of the 2018 Amendment Rules, making option C the correct answer.

Sources
  1. [1] https://frontline.thehindu.com/social-issues/unsettling-reform/article10106636.ece
  2. [3] https://labour.gov.in/sites/default/files/fte_final_notification.pdf
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Don’t just practise – reverse-engineer the question. This panel shows where this PYQ came from (books / web), how the examiner broke it into hidden statements, and which nearby micro-concepts you were supposed to learn from it. Treat it like an autopsy of the question: what might have triggered it, which exact lines in the book matter, and what linked ideas you should carry forward to future questions.
Q. Consider the following statements : As per the Industrial Employment (Standing Orders) Central (Amendment) Rules, 2018 1. if rules for …
At a glance
Origin: Mostly Current Affairs Fairness: Low / Borderline fairness Books / CA: 0/10 ¡ 10/10
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This question looks like a niche legal bouncer, but it was actually a 'Sitter' for those using updated standard books. The exact statements appeared as a practice MCQ in Nitin Singhania’s Economy book. It proves that 'Current Affairs' in Economy often solidifies into textbook updates within a year.

How this question is built

This question can be broken into the following sub-statements. Tap a statement sentence to jump into its detailed analysis.

Statement 1
Do the Industrial Employment (Standing Orders) Central (Amendment) Rules, 2018 state that implementing rules for fixed-term employment makes it easier for firms/companies to lay off workers?
Origin: Web / Current Affairs Fairness: CA heavy Web-answerable

Web source
Presence: 5/5
"Proportionate benefits for FTE workers, which would include gratuity after their service of one year, have been provided without laying down the need for notice or retrenchment benefit on non-renewal of contract."
Why this source?
  • Explicitly notes the amendment extended fixed-term employment to all sectors and provided benefits without requiring notice or retrenchment benefit on non-renewal.
  • The absence of a requirement for notice or retrenchment benefit on non-renewal implies employers can end fixed-term contracts without following layoff/retrenchment procedures, making it easier for firms.
Web source
Presence: 3/5
"ON March 16, the Ministry of Labour and Employment issued a notification amending the Industrial Employment (Standing Orders) Act and Rules, 1946, and introducing the concept of “fixed-term employment” in all sectors."
Why this source?
  • States that the March 2018 notification amended the Industrial Employment (Standing Orders) Act/Rules and introduced the concept of fixed-term employment in all sectors.
  • Identifies the amended rules as the Industrial Employment (Standing Orders) Central (Amendment) Rules, 2018, providing the regulatory basis for the fixed-term employment framework referenced in other passages.

Indian Economy, Nitin Singhania .(ed 2nd 2021-22) > Chapter 12: Indian Industry > INDUSTRIAL EMPLOYMENT (STANDING ORDERS) CENTRAL (AMENDMENT) RULES, 2018 > p. 393
Strength: 4/5
“\overline{v}INDUSTRIAL EMPLOYMENT (STANDING ORDERS) CENTRAL (AMENDMENT) RULES, 2018 • Ministry of Labour and Employment notified fixed-term employment for all sectors by amending the Industrial Employment (Standing Orders) Central Rules, 1946. Previously, fixed-term employment was there only for specific industrial sectors.• Workman for a fixed-term employment has to be engaged on the basis of a written contract of employment for a fixed period. However, the existing permanent workmen cannot be converted to fixed-term employment.”
Why relevant

States that the Ministry notified fixed‑term employment for all sectors and defines workmen on fixed‑term contracts by written contract for a fixed period.

How to extend

A student could infer that fixed‑term contracts (ending by expiry) provide an alternative to statutory layoff/retrenchment procedures and check whether expiry avoids prior government permission requirements.

Indian Economy, Vivek Singh (7th ed. 2023-24) > Chapter 8: Inclusive growth and issues > 8.5 Fixed Term Employment > p. 265
Strength: 5/5
“Fixed Term Employment is a contract in which an enterprise hires a labour for a specific period of time or a specific task (ex. a project) and the payment is fixed in advance and is not altered till the term expires. Such contracts are not given for routine jobs and are usually given out for jobs which are temporary in nature. After the term expires the worker will leave the job and there is no case of firing of worker and he gets all the benefits of regular/permanent workers. Till now, companies used to hire Contract Workers through an external agency i.e., contractor (basically the contractor has a pool of labours which they provide to the companies on contract basis for non-core activities), and the company pays compensation to the contractor/agency which then forwards the payment to the contract labourers.”
Why relevant

Defines fixed‑term employment as hiring for a specific period or task where after expiry the worker leaves and there is 'no case of firing', implying termination occurs by contract expiry rather than formal retrenchment.

How to extend

Combine this definition with knowledge of layoff/retrenchment rules to assess if contract expiry functions as an easier route for firms compared with seeking permission to retrench.

Indian Economy, Vivek Singh (7th ed. 2023-24) > Chapter 8: Inclusive growth and issues > Issues with the current laws and impact on economy: > p. 260
Strength: 4/5
“The Industrial Disputes Act 1947 (ID Act) states that an employer cannot layoff or retrenches any worker or close down operations of the establishment without prior permission from the appropriate government. According to employers and economists it has been a major bottleneck of employment generation in the organized sector. The ID Act (through an amendment made in mid 1980s) requires that any firm employing more than 100 workers needs to get permission from the state government before retrenching workers. In view of these rigidities, the employers have been resorting to technology up-gradation with the intention of keeping their workforce below 100.”
Why relevant

Explains that the Industrial Disputes Act requires prior government permission for layoff/retrenchment (a major bottleneck) for firms above thresholds.

How to extend

Use this rule to reason that any contractual form that avoids triggering retrenchment procedures (e.g., fixed‑term expiry) could make reducing workforce administratively easier for firms.

Indian Economy, Nitin Singhania .(ed 2nd 2021-22) > Chapter 12: Indian Industry > 1. Consider the following statements: > p. 404
Strength: 3/5
“As per the Industrial Employment (Standing Orders) Central (Amendment) Rules, 2018 • 1. If rules for fixed-term employment are implemented, it becomes easier for the firms/ companies to lay off workers. • 2. No notice of termination of employment shall be necessary in the case of temporary workman. Which of the statements given above is/are correct? • (a) 1 only • (b) 2 only • (c) Both 1 and 2 • 1. QCI was set up jointly by the Government of India and the Indian Industry. • 2. Chairman of QCI is appointed by the Prime Minister on the recommendations of the industry to the Government.”
Why relevant

Shows the exact MCQ claim exists in study material: 'If rules for fixed‑term employment are implemented, it becomes easier for the firms/companies to lay off workers.'

How to extend

A student can treat this as an asserted proposition to be tested by comparing the statutory effects of fixed‑term contracts and retrenchment rules in the ID Act and subsequent codes.

Indian Economy, Vivek Singh (7th ed. 2023-24) > Chapter 8: Inclusive growth and issues > 8.5 Fixed Term Employment > p. 266
Strength: 3/5
“Central Govt. had introduced "Fixed term employment" provisions in the existing labour acts but States did not notify that provision. The new Industrial Relations Code 2020 which was passed by the parliament recently has included fixed term employment for all industries which will now ensure a pan-India implementation.”
Why relevant

Notes central introduction of fixed‑term provisions but that states had not notified them, indicating partial/varied implementation across jurisdictions.

How to extend

A student could map which states implemented the rules (using external sources) to see whether firms in notified states can more easily reduce staff via fixed‑term hires than in non‑notified states.

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