Labor law reform, and provisions in it

The Labor Law Reform

New labor reforms will promote ease of doing business in the state. However, it is important that companies protect the interests and wellbeing of workers.

Madhya Pradesh, Uttar Pradesh and Gujarat have suspended disgruntled labor laws, to remove barriers to economic rejuvenation after the epidemic.

Changes in Gujarat

In Gujarat, the new industrial establishment are exempted from all labor laws exempt the following

· Maximum Wages Act.

· Industry Safety rules.

· Employees Compensation Act.

· Ordinance to roll out benefits that would be available for 1200 days.

· 100 percent online approvals within 15 days.

· 33,000 hectares to be set aside and land to be allotted in 7 days.

Changes in Uttar Pradesh

· The industry has been exempted from labor laws, exempted the following.

· Building and other Construction Workers’ Act of 1996.

· Workmen Compensation Act of 1923.

· Bonder Labor (Abolition) system Act of 1976.

· A section of payment of wages Act will be applicable.

Changes in Madhya Pradesh

Establishment with up to 100 workers can hire according to needs.

No registration for contractors with 50 laborers.

No factory inspection for 3 months.

No inspection for firms with less than 50 workers.

Third Party inspection allowed.

Registration and licenses to be issued within a day.

Renewal of factory licenses once in 10 years.

Startups need one-time registration and no renewal.

Shift hours raised to 12 hours from 8 hours in a factory.

Overtime of up to 72 hours permitted.

Flexibility in changing shifts.

Shops and establishment can operate from 6 AM till midnight.

Changes in Others states

In Rajasthan, Himachal Pradesh and Punjab, the Factories Act was amended to increase the work time from 12 hours a day and 72 hours a week instead of the 8 hours a day and 48 hours a week.

Rajasthan has amended the Industries Disputes Act to increase the threshold for layoffs and retrenchment from 100 to 300. The threshold membership of the trade union has been increased from 15 percent to 30 percent.

Maharashtra has allowed shops/establishment/factories to submit a consolidated annual returns in lieu of multiple returns under the various labor laws.

Tamil Nadu has permitted the employment of women in night shifts subject to safeguard measures. In Kerala, it has been decided to facilitate new industrial license within a week after the applications are filled. However, this would be subject to the investor agreeing to complete formalities within a year.

Impact of the labor law reform

· Free hand to hire and fire.

· No labor inspection.

· No government intervention.

· No role of unions.

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