▷ Fixed-term contracts are used in practice but are not expressly regulated under the IDA. They are generally treated as temporary contracts.
→ Under Paragraph 2(e) of the Schedule I – "Model Standing Orders" of the MSO, a "temporary workman" is defined as a workman who has been engaged for work which is of an essentially temporary nature likely to be finished within a limited period.

No statutory provisions were found in the examined legislation in this respect.

▷ There were no statutory limits on the maximum number of successive fixed-term contracts.

▷ There were no statutory limits on the duration of fixed-term contracts.

The Industrial Disputes Act 1947 and Model Standing Orders do not require any specific objective or material reasons for using fixed-term contracts.

▷ The law itself (Industrial Employment (Standing Orders) Act, 1946 does not impose a strict statutory maximum on probation. However, under Paragraph 2(a), 2(b), and 2(c) of the Schedule I – "Model Standing Orders" of the MSO, definitions of "permanent worker" and "probationer" refer to a three-month probationary period.
→ Paragraph 2 of the MSO on classification of workmen indicates that:
(a) Workmen shall be classified as --
(1) permanent,
(2) probationers,
(3) badlis,
(4) temporary,
(5) casual,
(6) apprentices.
(b) A “permanent workman” is a workman who has been engaged on a permanent basis and includes any person who has satisfactorily completed a probationary period of three months in the same or another occupation in the industrial establishment, including breaks due to sickness, accident, leave, lock-out, strike (not being an illegal strike) or involuntary closure of the establishment.
(c) A “probationer” is a workman who is provisionally employed to fill a permanent vacancy in a post and has not completed three months’ service therein. If a permanent employee is employed as a probationer in a new post, he may, at any time during the probationary period of three months, be reverted to his old permanent post.

▷ Workers' categories excluded: Police; armed forces; prison staff; managerial or administrative positions; supervisory staff drawing wages exceeding the statutory amount (supervisory staff drawing wages exceeding ₹1,600 per month).
▶ The Industrial Disputes Act (IDA)
→ Section 2(s) IDA defines “workman” as: any person (including an apprentice) employed in any industry to do any manual, unskilled, skilled, technical, operational, clerical or supervisory work for hire or reward, whether the terms of employment be express or implied, and for the purposes of any proceeding under this Act in relation to an industrial dispute, includes any such person who has been dismissed, discharged or retrenched in connection with, or as a consequence of, that dispute, or whose dismissal, discharge or retrenchment has led to that dispute, but does not include any such person:
(i) who is subject to the Air Force Act, 1950 (45 of 1950), or the Army Act, 1950 (46 of 1950), or the Navy Act, 1957 (62 of 1957); or
(ii) who is employed in the police service or as an officer or other employee of a prison; or
(iii) who is employed mainly in a managerial or administrative capacity; or
(iv) who, being employed in a supervisory capacity, draws wages exceeding [ten thousand rupees] per mensem or exercises, either by the nature of the duties attached to the office or by reason of the powers vested in him, functions mainly of a managerial nature.]
▷ Partial exclusion Temporary workers, probationers, and badlis are excluded from the entitlement to notice or pay in lieu of notice upon termination. However, temporary workers cannot be terminated as punishment without being given an opportunity to explain the alleged misconduct (MSO, para. 13(2)).
▶ Schedule I – "Model Standing Orders" (MSO)
→ Paragraph 13(2) of Schedule I of the MSO provides that: No temporary workman, whether monthly-rated, weekly-rated or piece-rated, and no probationer or badli shall be entitled to any notice or pay in lieu thereof if his services are terminated, but the services of a temporary workman shall not be terminated as a punishment unless he has been given an opportunity to explain the charges of misconduct alleged against him in the manner prescribed in Paragraph 14.

▷ Union activities
▶ The Industrial Disputes Act (IDA)
→ Clause I (1) of the IDA (Fifth Schedule) on Unfair Labour Practices - these include prohibition of dismissal based on: trade union activity or membership, and taking part in a strike which is not deemed to be illegal according to the IDA.
→ Clause I(5) of the Fifth Schedule of the IDA states that the Unfair Labour Practice shall be the following:
To discharge or dismiss workmen:
(a) by way of victimisation;
(b) not in good faith, but in the colourable exercise of the employer's rights;
(c) by falsely implicating a workman in a criminal case on false evidence or on concocted evidence;
(d) for patently false reasons;
(e) on untrue or trumped-up allegations of absence without leave;
(f) in utter disregard of the principles of natural justice in the conduct of domestic enquiry or with undue haste;
(g) for misconduct of a minor or technical character, without having any regard to the nature of the particular misconduct or the past record or service of the workman, thereby leading to a disproportionate punishment."
▷ Maternity
▶ The Maternity Benefit Act
→ Section 12(1) of the Maternity Benefit Act indicates that: When a woman absents herself from work in accordance with the provisions of this Act, it shall be unlawful for her employer to discharge or dismiss her during or on account of such absence or to give notice of discharge or dismissal on such a day that the notice will expire during such absence, or to vary to her disadvantage any of the conditions of her service.
▷ Constitutional rule
▶ Constitution of India
→ Section 16.2 of the Constitution of India on Equality of opportunity in matters of public employment, states that: "No citizen shall, on grounds only of religion, race, caste, sex, descent, place of birth, residence or any of them, be ineligible for, or discriminated against in respect of, any employment or office under the State.
NOTE: This applies only in relation to public employment.

▷ Union activities
▶ The Industrial Disputes Act (IDA)
→ Clause I(1) of the IDA (Fifth Schedule) on Unfair Labour Practices - include prohibition of dismissal based on: trade union activity or membership, and taking part in a strike which is not deemed to be illegal according to the IDA.
▷ Maternity
▶ The Maternity Benefit Act
→ Section 12(1) of the Maternity Benefit Act indicates that: When a woman absents herself from work in accordance with the provisions of this Act, it shall be unlawful for her employer to discharge or dismiss her during or on account of such absence or to give notice of discharge or dismissal on such a day that the notice will expire during such absence, or to vary to her disadvantage any of the conditions of her service.

▷ Retrenchment (economic reasons)
▶ The Industrial Disputes Act (IDA)
→ Section 25-F IDA provides that: No workman employed in any industry who has been in continuous service for not less than one year under an employer shall be retrenched by that employer until:
(a) the workman has been given one month’s notice in writing indicating the reasons for retrenchment and the period of notice has expired, or the workman has been paid in lieu of such notice, wages for the period of the notice; (...).
▷ Termination of employment
▶ Model Standing Orders (MSO)
→ Paragraph 13 MSO indicates that:
(1) For terminating the employment of a permanent workman, notice in writing shall be given either by the employer or the workmen, one month’s notice in the case of monthly-rated workmen, and two weeks’ notice in the case of other workmen: one month’s or two weeks’ pay, as the case may be, may be paid in lieu of notice.
(2) No temporary workman, whether monthly-rated, weekly-rated or piece-rated, and no probationer or badli shall be entitled to any notice or pay in lieu thereof if his services are terminated, but the services of a temporary workman shall not be terminated as a punishment unless he has been given an opportunity to explain the charges of misconduct alleged against him in the manner prescribed in Paragraph 14. (...).
▷ Termination of services (in Coal Mines)
▶ MSO Schedule I - A: Industrial Establishment in Coal Mines
→ Paragraph 13 of the MSO for Industrial Establishment in Coal Mines (under schedule I - A) indicates that:
(a) For terminating the services of permanent workman having less than one year of continuous service, notice of one month in writing with reasons or wages in lieu thereof shall be given by the employer:
Provided that no such notice shall be required to be given when the services of the workman are terminated on account of misconduct established in accordance with the Standing Orders.
(b) Subject to the provisions of the Industrial Disputes Act, 1947 no notice of termination of employment shall be necessary in the case of temporary and Badli workmen:
Provided that a temporary workman, who has completed three months continuous service, shall be given two weeks’ notice of the intention to terminate his employment if such termination is not in accordance with the terms of the contract of his employment :
Provided further that when the services of a temporary workman, who has not completed three months’ continuous service, are terminated before the completion of the term of employment given to him, he shall be informed of the reasons in writing. When the services of a badli workman are terminated before the return to work of the permanent incumbent or the expiry of his badli’s term of employment, he/she shall be informed of the reasons for such termination in writing.

▷ Retrenchment (economic reasons)
one month’s notice or pay in lieu (Section 25F IDA) for workers with at least one year of service.
▶ The Industrial Disputes Act (IDA)
→ Section 25-F IDA indicates that: No workman employed in any industry who has been in continuous service for not less than one year under an employer shall be retrenched by that employer until:
(a) The workman has been given one month’s notice in writing, indicating the reasons for retrenchment, and the period of notice has expired, or the workman has been paid in lieu of such notice, wages for the period of the notice; (...).
▷ MSO provides that permanent monthly paid workers are entitled to one month's notice, while temporary workman shall be given two week's notice.
▷ Termination of employment
▶ Model Standing Orders (MSO)
→ Paragraph 13 MSO indicates that:
(1) For terminating the employment of a permanent workman, notice in writing shall be given either by the employer or the workmen, one month’s notice in the case of monthly-rated workmen, and two weeks’ notice in the case of other workmen: one month’s or two weeks’ pay, as the case may be, may be paid in lieu of notice.
(2) No temporary workman, whether monthly-rated, weekly-rated or piece-rated, and no probationer or badli shall be entitled to any notice or pay in lieu thereof if his services are terminated, but the services of a temporary workman shall not be terminated as a punishment unless he has been given an opportunity to explain the charges of misconduct alleged against him in the manner prescribed in Paragraph 14. (...).
▷ Termination of services (in Coal Mines)
▶ MSO Schedule I - A: Industrial Establishment in Coal Mines
→ Paragraph 13 of the MSO for Industrial Establishment in Coal Mines (under schedule I - A) indicates that:
(a) For terminating the services of permanent workman having less than one year of continuous service, notice of one month in writing with reasons or wages in lieu thereof shall be given by the employer:
Provided that no such notice shall be required to be given when the services of the workman are terminated on account of misconduct established in accordance with the Standing Orders.
(b) Subject to the provisions of the Industrial Disputes Act, 1947 no notice of termination of employment shall be necessary in the case of temporary and Badli workmen:
Provided that a temporary workman, who has completed three months continuous service, shall be given two weeks’ notice of the intention to terminate his employment if such termination is not in accordance with the terms of the contract of his employment :
Provided further that when the services of a temporary workman, who has not completed three months’ continuous service, are terminated before the completion of the term of employment given to him, he shall be informed of the reasons in writing. When the services of a badli workman are terminated before the return to work of the permanent incumbent or the expiry of his badli’s term of employment, he/she shall be informed of the reasons for such termination in writing.

Note: Chapter V-B (Sections 25K to 25R) applies only to industrial establishments employing 100 or more workers.

No statutory provisions were found in the examined legislation in this respect.

▷ Retrenchment (economic reasons)
▶ The Industrial Disputes Act (IDA)
→ Section 25-N(1)(b) IDA indicates that: No workman employed in any industrial establishment to which this Chapter applies, who has been in continuous service for not less than one year under an employer shall be retrenched by that employer until,— the prior permission of the appropriate Government or such authority as may be specified by that Government by notification in the Official Gazette (hereafter in this section referred to as the specified authority) has been obtained on an application made in this behalf.
▷ Note: Retrenchment covers both individual and collective terminations for economic or operational reasons.

▷ Retrenchment (economic reasons)
▶ The Industrial Disputes Act (IDA)
→ Section 25-O IDA states that:
(1) An employer who intends to close down an undertaking of an industrial establishment to which this Chapter applies shall, in the prescribed manner, apply, for prior permission at least ninety days before the date on which the intended closure is to become effective, to the appropriate Government, stating clearly the reasons for the intended closure of the undertaking and a copy of such application shall also be served simultaneously on the representatives of the workmen in the prescribed manner:
Provided that nothing in this sub-section shall apply to an undertaking set up for the construction of buildings, bridges, roads, canals, dams or for other construction work.

▷ Note: Chapter V-B (§§ 25-k to 25-S) of the IDA contains special provisions relating to lay-off, retrenchment and closure. These provisions apply only to industrial establishments employing 100 or more workers and require, among other things, the prior permission of the appropriate Government in the cases of closing down an undertaking (§ 25-O) and the retrenchment of a worker who has been in continuous service with the employer for not less than one year (§ 25-N).
▶ The Industrial Disputes Act (IDA)
▷ Retrenchment (economic reasons)
→ Section 25-N(1)(b) and (2 to 7) IDA indicates that:
(1) No workman employed in any industrial establishment to which this Chapter applies, who has been in continuous service for not less than one year under an employer, shall be retrenched by that employer until (...),
▻ (b) the prior permission of the appropriate Government or such authority as may be specified by that Government by notification in the Official Gazette (hereafter in this section referred to as the specified authority) has been obtained on an application made in this behalf.
(2) An application for permission under sub-section (1) shall be made by the employer in the prescribed manner, stating clearly the reasons for the intended retrenchment, and a copy of such application shall also be served simultaneously on the workmen concerned in the prescribed manner.
(3) Where an application for permission under sub-section (1) has been made, the appropriate Government or the specified authority, after making such enquiry as it thinks fit and after giving a reasonable opportunity of being heard to the employer, the workmen concerned and the persons interested in such retrenchment, may, having regard to the genuineness and adequacy of the reasons stated by the employer, the interests of the workmen and all other relevant factors, by order and for reasons to be recorded in writing, grant or refuse to grant such permission and a copy of such order shall be communicated to the employer and the workmen.
(4) Where an application for permission has been made under sub-section (1) and the appropriate Government or the specified authority does not communicate the order granting or refusing to grant permission to the employer within a period of sixty days from the date on which such application is made, the permission applied for shall be deemed to have been granted on the expiration of the said period of sixty days.
(5) An order of the appropriate Government or the specified authority granting or refusing to grant permission shall, subject to the provisions of sub-section (6), be final and binding on all the parties concerned and shall remain in force for one year from the date of such order.
(6) The appropriate Government or the specified authority may, either on its own motion or on the application made by the employer or any workman, review its order granting or refusing to grant permission under sub-section (3) or refer the matter or, as the case may be, cause it to be referred, to a Tribunal for adjudication:
Provided that where a reference has been made to a Tribunal under this sub-section, it shall pass an award within a period of thirty days from the date of such reference.
(7) Where no application for permission under sub-section (1) is made, or where the permission for any retrenchment has been refused, such retrenchment shall be deemed to be illegal from the date on which the notice of retrenchment was given to the workman and the workman shall be entitled to all the benefits under any law for the time being in force as if no notice had been given to him. (...).
▷ Note: Retrenchment covers both individual and collective terminations for economic or operational reasons.
▷ Closing down an undertaking
→ Section 25-O IDA states that:
(1) An employer who intends to close down an undertaking of an industrial establishment to which this Chapter applies shall, in the prescribed manner, apply, for prior permission at least ninety days before the date on which the intended closure is to become effective, to the appropriate Government, stating clearly the reasons for the intended closure of the undertaking and a copy of such application shall also be served simultaneously on the representatives of the workmen in the prescribed manner:
Provided that nothing in this sub-section shall apply to an undertaking set up for the construction of buildings, bridges, roads, canals, dams or for other construction work.
(2) Where an application for permission has been made under sub-section (1), the appropriate Government, after making such enquiry as it thinks fit and after giving a reasonable opportunity of being heard to the employer, the workmen and the persons interested in such closure may, having regard to the genuineness and adequacy of the reasons stated by the employer, the interests of the general public and all other relevant factors, by order and for reasons to be recorded in writing, grant or refused to grant such permission and a copy of such order shall be communicated to the employer and the workmen.
(3) Where an application has been made under sub-section (1) and the appropriate Government does not communicate the order granting or refusing to grant permission to the employer within a period of sixty days from the date on which such application is made, the permission applied for shall be deemed to have been granted on the expiration of the said period of sixty days.
(4) An order of the appropriate Government granting or refusing to grant permission shall, subject to the provisions of sub-section (5), be final and binding on all the parties and shall remain in force for one year from the date of such order.
(5) The appropriate Government may, either on its own motion or on the application made by the employer or any workman, review its order granting or refusing to grant permission under sub-section (2) or refer the matter to a Tribunal for adjudication: (...).

No statutory provisions were found in the examined legislation in this respect.

▷ Retrenchment (economic reasons)
▶ The Industrial Disputes Act (IDA)
→ Section 25-G IDA indicates that: Where any workman in an industrial establishment, who is a citizen of India, is to be retrenched and he belongs to a particular category of workmen in that establishment, in the absence of any agreement between the employer and the workman in this behalf, the employer shall ordinarily retrench the workman who was the last person to be employed in that category, unless for reasons to be recorded the employer retrenches any other workman.

▷ Retrenchment (economic reasons)
▶ The Industrial Disputes Act (IDA)
→ Section 25-H IDA provides that: Where any workmen are retrenched, and the employer proposes to take into his employ any persons, he/she shall, in such manner as may be prescribed, give an opportunity to the retrenched workmen who are citizens of India to offer themselves for reemployment, and such retrenched workmen who offer themselves for reemployment shall have preference over other persons.

No statutory provisions were found in the examined legislation in this respect.

▶ Payment of Gratuity Act (Gratuity Act )
▻ Under the Gratuity Act, gratuity is payable upon termination of employment after five years of continuous service (waived in cases of death or disablement). However, gratuity may be forfeited in cases of serious misconduct (§ 4(6) of the Gratuity Act).
→ Section 4(1) of the Gratuity Act states:
"Gratuity shall be payable to an employee on the termination of his employment after he has rendered continuous service for not less than five years:
(a) on his superannuation, or
(b) on his retirement or resignation, or
(c) on his death or disablement due to accident or disease:
Provided that the completion of continuous service of five years shall not be necessary where the termination of the employment of any employee is due to death or disablement.
▷ Note: Disablement means such disablement which incapacitates an employee for the work which he was capable of performing before the accident or disease resulting in such disablement (§ 4 explanation).
(2) For every completed year of service or part thereof in excess of six months, the employer shall pay gratuity to an employee at the rate of fifteen days' wages based on the rate of wages last drawn by the employee concerned:
▻ Provided that in the case of a piece-rated employee, daily wages shall be computed on the average of the total wages received by him for a period of three months immediately preceding the termination of his employment, and, for this purpose, the wages paid for any overtime work shall not be taken into account:
▻ Provided further that in the case of an employee employed in a seasonal establishment, the employer shall pay the gratuity at the rate of seven days' wages for each season.
(...).
(6) Notwithstanding anything contained in sub-section (1), -
(a) The gratuity of an employee, whose services have been terminated for any act, wilful omission or negligence causing any damage or loss to, or destruction of, property belonging to the employer, shall be forfeited to the extent of the damage or loss so caused.
(b) The gratuity payable to an employee may be wholly or partially forfeited:
(i) if the services of such employee have been terminated for his riotous or disorderly conduct or any other act of violence on his part, or
(ii) if the services of such employee have been terminated for any act which constitutes an offence involving moral turpitude, provided that such offence is committed by him in the course of his employment.

▷ Under the Industrial Disputes Act, 1947 (IDA), a workman who has been in continuous service for not less than one year shall be entitled to retrenchment compensation at the time of retrenchment equivalent to 15 days’ average pay for every completed year of continuous service (or any part thereof in excess of six months).
→ 25F(b) and (c) IDA provides that: No workman employed in any industry who has been in continuous service for not less than one year under an employer shall be retrenched by that employer until— (...);
(b) The workman has been paid, at the time of retrenchment, compensation which shall be equivalent to fifteen days' average pay (for every completed year of continuous service) or any part thereof in excess of six months; and
(c) Notice in the prescribed manner is served on the appropriate Government (or such authority as may be specified by the appropriate Government by notification in the Official Gazette).

Note: Gratuity is not generally referred to as “severance pay” in India. It is a specific statutory benefit payable only upon termination after 5 years of employment.