Contingent Worker

Grouping these as contingent workers is useful for workforce planning and useless for compliance. Each row carries a different answer on contributions, leave, notice and records, and an organisation that manages them as one population will apply the wrong rules to most of them.

The Industrial Relations Code, 2020, in force since 21 November 2025, expressly recognises fixed term employment: direct engagement on a written contract for a stated period, ending on expiry without that being a retrenchment.

The condition attached is parity. A fixed term employee is entitled to the same hours of work, wages, allowances and other benefits as a permanent employee doing the same or similar work, on a proportionate basis. So it is not a cheaper class of employee, and organisations that expected it to be have generally misread it.

What it does offer is a clean answer where the need is genuinely temporary but the work is the organisation's own. The person is on-roll, directly employed and directly managed, which removes the risk that a contractor arrangement is found to be a sham. Gratuity eligibility for this category is addressed in the Code and is a point to confirm specifically, since it differs from the general continuous service rule.

The comparison worth making is against engaging the same people through a staffing vendor. Fixed term employment costs the parity benefits and the direct employment obligations; the vendor route costs a margin and carries principal employer exposure. Neither is obviously cheaper once both are priced honestly.

Two failure modes account for most of it.

• Contract labour managed as employees. The organisation selects the individuals, sets their hours, approves their leave and appraises them, while a contractor runs payroll and adds a margin. That is staffing, it attracts the principal employer obligations, and it invites the conclusion that the organisation is the real employer.
• Employees engaged as consultants. Fixed hours, supervision, company equipment, leave approvals, invoices raised monthly for the same amount. The label does not survive examination, and the consequences run backwards over the whole engagement: contributions, leave, gratuity and notice.

Both are usually adopted to reduce cost or headcount, and both convert a known cost into an unknown liability. The exposure is retrospective, which is what makes it expensive: a two-year arrangement reclassified is two years of contributions, not one month's.

The related point is verification. Where contract labour is used properly, the principal employer is still not insulated from the contractor's failure to pay wages or deposit contributions, so checking that deposits were actually made is part of managing the arrangement rather than an unusual precaution.

The Code on Social Security, 2020 brings gig workers and platform workers into statutory scope for the first time, defining them separately from employees and providing for welfare schemes funded in part by a contribution from aggregators. The contribution is the part that has been read: section 114(4) and (5) set it at a rate not exceeding two per cent and not less than one per cent of the aggregator's annual turnover, subject to a cap by reference to what is paid to such workers. The subjects the schemes may cover are not enumerated here, because the sections providing for them have not been checked against the enacted text.

Two things to note.

• This does not make gig workers employees. It creates a distinct category with its own social security architecture, which is a different thing and is worth being precise about.
• The obligations fall on aggregators as defined, so whether a particular platform is within scope depends on the definition rather than on how it describes itself.

The schemes and the contribution mechanics are the parts to verify, since implementation has been staged and the position on registration, the fund and the applicable rate should be checked against the current notifications rather than the Code alone.