Gujarat Government Announces Slew of Labor Reforms
IndraStra Global

Gujarat Government Announces Slew of Labor Reforms

Gujarat Government Announces Slew of Labor Reforms

In a bid to help the industry hit hard by the COVID-19 forced lockdown, and to attract fresh investments, the Gujarat government has announced a series of relaxations in labor laws, and more reforms are in the pipeline, the Labour and Employment department has said.

Last week, Chief Minister Vijay Rupani announced an exemption from most of the labor laws for 1,200 days for new industries, a decision, he said is to attract industries to the state and to create more employment opportunities.

In April, the Labour and Employment Department allowed factories to work round-the-clock. Factories were allowed to increase workers’ shifts from eight hours to 12 per day with a provision for a break of at least 30 minutes after six hours, and a proportionate increase in wages. Similarly, the timeline for the renewal of labor licenses under the Contract Labour Act and the Inter-State Migrant Workmen Act was extended in view of the lockdown.

“The lockdown because of the COVID-19 outbreak has adversely impacted industries and economic growth. The government is trying to play the role of a facilitator to put growth back on track. These labor reforms, coupled with industry-friendly policies, quick decision-making, and availability of skilled manpower, will help Gujarat attract new industries. However, we are ensuring that the interests of workers are also protected,” said Vipul Mittra, additional chief secretary, Labour, and Employment department.

Mittra said that a host of labor reforms are in the pipeline, which will help to exist as well as new industries by curtailing procedural formalities.

For instance, in the very near future, prior permission of the state government will not be required for layoff, retrenchment, and closure of industrial establishments having up to 300 workers, up from the existing provision of 100 as per the Industrial Disputes Act, 1947.

Similarly, the State Cabinet has approved an ordinance to exempt factories or establishments registered with the Industries Department from certain labor laws for 1,200 days from the date of commencement of production.

“This relaxation is for units that begin operations within a year of publication of the ordinance,” said Mittra. Amendments related to an exemption to industrial units from setting up grievance redressal mechanisms are also under the government’s consideration.

Similarly, The Factories Act, 1948, applies to all places employing 10 or more workers carrying out manufacturing activity with the aid of power, or places employing 20 or more workers carrying out manufacturing activity without the aid of power. After the ordinance, the Act will apply to places employing 20 or more workers carrying out manufacturing activity with the aid of power, or places employing 40 or more workers carrying out manufacturing activity without the aid of power

At present, in case of violation of any provisions of the Factories Act, cases are required to be filed before the first class judicial court. This has led court cases to pile up, resulting in a delay in workers getting justice. In view of this, a new section with the provision for settlement (compounding) in record-related offenses has been inserted.

Similarly, the time limit for payment of bonus for the accounting year 2019-2020 has been extended up to 31-01-2021 instead of 30-11-2020.


“We are confident that these measures will make it easier to do business in Gujarat,” he added.

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