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President gives assent industrial disputes Bill, to make layoffs easier in Gujarat

The Gujarat Assembly had passed the Bill, which makes it easier for industrial units to layoff or retrench workers, on September 22 last year.

By: Express News Service | Ahmedabad | January 9, 2021 10:46:55 pm
Gujarat Labour laws, Gujarat retrench workers, Layoffs easire in Gujarat, Gujarat migrant workers, Industrial Disputes bill, Gujarat Assembly, President Ram Nath Kovind, Ahmedabad news, Gujarat news, Indian express news“Labour laws’ reforms have been done in line with Ease of Doing Business on the instructions of Chief Minister Shri Vijay Rupani as per the vision of the Prime Minister,” Vipul Mittra, additional chief secretary, Labour and Employment department, said. (Representational)

President Ram Nath Kovind on January 1 has given his assent to The Industrial Disputes (Gujarat Amendment) Bill, 2020, an official release issued by the state government stated. The Gujarat Assembly had passed the Bill, which makes it easier for industrial units to layoff or retrench workers, on September 22 last year.

“Labour laws’ reforms have been done in line with Ease of Doing Business on the instructions of Chief Minister Shri Vijay Rupani as per the vision of the Prime Minister,” Vipul Mittra, additional chief secretary, Labour and Employment department, said.

As per the Industrial Disputes Act, 1947, establishments having 100 or more workers were required to seek prior permission of the state government before effecting layoff, retrenchment, or closure. Under The Industrial Disputes (Gujarat Amendment) Act, 2020, the number of workers have been increased to 300, thereby allowing firms employing fewer than 300 workers to effect layoff, retrenchment, or closure without seeking the government’s permission.

So far, if workers were laid off, a company required to pay them compensation amounting to 15 days’ salary for every year of service. The 2020 amendment Act states that workers will be paid an amount equivalent to the average pay of the last three months’ salary as compensation. Earlier, workers were required to be given three-month notice or wages for the notice period before retrenchment. Under the new amendment, they can be retrenched after being issued three-month notice.

Mittra said the exemptions are mainly aimed at reducing the compliance burden on industries which will help the state attract new industries and investments to create more employment opportunities. “The Covid-19 pandemic situation has adversely impacted industries and thereby economic growth. The government is trying to play the role of a facilitator to put growth back on track. These labour 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 interests of workers are also protected,” he added.

Mittra added that the state was confident that these measures will make it easier to do business in Gujarat.

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