The ordinance was issued earlier this month on July 1. (Representational)
Amending the Industrial Disputes Act, the Gujarat government recently issued an ordinance under which the upper limit for an industrial establishment to seek the state government’s permission for lay-offs, retrenchment or closure has been increased from a 100 labourers to 300 labourers. With this ordinance, an industrial establishment which employs up to 300 labourers does not need to take permission of the state government for lay-offs, retrenchment or closure. Earlier, any establishment employing over a 100 employees was required to take the state government’s permission.
Top officials of the state’s Labour and Employment department said that the decision was taken as a part of labour reforms and to encourage fresh investments. The ordinance was issued earlier this month on July 1. Additional Chief Secretary (Labour and Employment) Vipul Mittra said that the presidential consent for the amendment was recently received.
The object statement of the ordinance said that it was considered necessary to have a provision which would help and encourage employers to employ more number of workers and therefore, the provision has been amended to increase the number of workmen or labourers from 100 to 300.
Mittra said that the amendment has been made as there were demands from the industry in this regard. “There was a representation by the Gujarat Chamber of Commerce & Industry (GCCI) (in this regard) and some small factories and units, particularly in Surat, were facing difficulties particularly after the lockdown,” he said. “This (amendment) will protect the smaller investors. They can go for closure without permission, So, it will cut the time period. The (amended) provision will attract people to invest. If you can’t remove people easily then you won’t hire them easily. Mindset of the people is such that why hire somebody if you can’t throw him out tomorrow, why take the risk?… This will also encourage fresh investments.”
The object statement also highlighted the industrial peace in Gujarat while emphasising a need to strike the balance of interests between the industries and the workers.
The statement read, “Since its inception, Gujarat has been an industrially progressive State and in the last decade, it has become an industrial hub and growth engine of the country. There have been cordial relations between the industry and the workers and there have been hardly any occasions of strikes or lock-outs. More and more industries are being established in Gujarat and therefore, the State Government has considered it necessary to strike the balance of interests between the industries and the workers and create an environment which is conducive to both, the industry and the workers. Industry and labour are both integral parts which ought to have a relationship of professionalism, cordiality, and trust for sustained growth and development as also transforming the general quality of life.”