No permit needed to retrench 300 or less: Gujarat govt

The Gujarat government has made labour laws flexible for owners of industrial units, by amending the Industrial Disputes Act through an ordinance.


Gujarat government has allowed industrial units employing 300 workers or less to lay off workers or shut shop without seeking permission from the state government. This flexibility was earlier available only to industrial units with 100 or less workers. This amendment, to Section 25K of the Industrial Disputes Act, was brought about by the Gujarat government, via an ordinance, which was approved by the governor.

The move is expected to encourage owners of industrial units to employ more workers. With this amendment, employers will now consider increasing their workforce strength to 300.

Now, the employers will have to give three months’ notice to the workers. Earlier, they were allowed to terminate the employment by giving three months’ wages. The employers will also have to give the workers an amount equivalent to the average pay of three months over and above the amount the worker is eligible for, as per law.

However, labour and trade unions are not happy with the amendment. They feel labourers will be exploited as they go against the interest of the labourers.

In May, Uttar Pradesh and Gujarat had proposed the suspension of some labour laws for five years, to encourage investments from China. In response, the Centre had asked these states to specify the labour laws that they wished to be suspended, via an ordinance.

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