Executive Summary:

Gujarat has notified the Industrial Disputes (Gujarat Amendment) Ordinance, 2020 that further amends the Industrial Disputes Act, 1947 and the Ordinance shall come into force at once.

Key Highlights –

  • section 25K has been amended, wherein the threshold limit for applicability of provisions of chapter VB has been increased from 100 workers to 300 workers, employed in the industrial establishments (not being an establishment of a seasonal character or in which works are performed only intermittently). Chapter VB pertains to provisions related to lay off, retrenchment, closure of certain establishments. The employers are required to obtain prior permission from the State Government before effecting lay off, retrenchment or closure of its establishments. To encourage employers to employ more workers, this change has been effected;
  • section 25N has been amended that specifies the conditions precedent to retrenchment of workmen. It has been notified that the employer shall be required to give 3 month’s notice to the workman and merely paying of wages in lieu of notice has been deleted. To provide additional financial security to the workman, the employer shall also compensate the worker, by paying an amount equivalent to its last three months average pay;
  • section 25O has been amended, wherein it has been notified that the employer shall compensate the workmen, who shall be affected by the closure of the establishment, by paying wages equivalent to its last three months average pay, along with paying compensation as per prescribed rates.

Industrial Disputes Act, 1947
 Governor of Gujarat
Effective Date : 03 Jul, 2020