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Gujrat allows industries to retrench workmen without permission if employ up to 300

 Jan.12.2021:President 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 on September 22 last year, which makes for industrial units to layoff or retrench workers without permission if employing up to 300 workmen.

“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 now 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.