President Pranab Mukherjee’s nod to Gujarat labour bill

President Pranab Mukherjee’s nod to Gujarat labour bill

The new act introduces payment of wages by cheques; gives the government power to prohibit labour strikes in public services, more control over industry

With the President giving nod to the new Gujarat labour bill, soon 1.20 crore labourers in Gujarat would see their wages by cheques directly transferred into bank accounts created under the Jan Dhan Yojana. The Bill also allows the state government to prohibit labour strikes in the public utility.

Besides reforms on wages, the Gujarat Labour Laws (Gujarat Amendment) Act, 2015, bill for which was passed by a majority vote in the Assembly in February, gave the government greater control over running of industries while trying to minimise disputes between labourers and employers in out-of-court settlement by a new compromise formula — “compounding the offence”.

As certain clauses in the bill needed nod from the central government, Governor O P Kohil had sent it to Delhi.


In the act, certain basic definitions in the Minimum Wages Act, 1948, and clauses in the Industrial Disputes Act, 1947, allowing more policing of the state over industries, have been changed. It has reforms like payment of wages by cheques in establishments having more than 20 labourers to give impetus to the Pradhan Mantri Jan Dhan Yojana.


Among the other 14 critical amendments, one introduced a “compromise” formula — “compounding of offences” — between industry and labour in case of any dispute. While presenting the bill in the Assembly, labour and employment minister Vijay Rupani had stated: “For this, the government will charge up to Rs 21,000 as penalty from the employer and give 75 per cent of that penalty money to the affected employee or employees. This will bring quick solutions and reduce burden on courts.”

The new Act also gives powers to the government to prohibit strikes in public utility services in the first instance by increasing the period of prohibition from the existing six months to one year, “and subsequently by any period not exceeding two years”.

On the other hand, the legislation drastically scaled down the period a workman could fight his/ her case against the industry from three to one year.

Under the new law, a workman gets only a year to make an application against his dismissal or discharge raising as “industrial dispute” to the labour court or tribunal..

In accident cases, the government would become pleader in case if the victim has not moved the Labour Commission within 90 days, and mediate an out-of-court settlement with a maximum compensation of Rs 21,000, of which 25 per cent would go to the government. The new law allows employers to change the nature of job of the employees without prior notice.

The definition of “contractor” has also been amended to include “outsourcing agencies”, which in some cases, is the government itself. This would attest more power to the government.