President assent to Gujarat labour law with contentious provisions

Ahmedabad: Gujarat's labour reforms bill has received President Pranab Mukherjee's assent with some controversial provisions like settling disputes between workers and management through a 'compromise' formula with payment of 'penalty' to the government among the new measures.

The President gave his assent to the The Labour Laws (Gujarat Amendment) Bill, 2015 which provides for "compounding of offenses" wherein industrial employee(s) can arrive at a compromise with the employer without moving court. The Bill proposes a total of 14 amendments to various labour laws.

"We have received the Presidential assent for the The Labour Laws (Gujarat Amendment) Bill, 2015," C J Gothi Parliamentary Secretary of Gujarat government told PTI Wednesday.

"The assent was received in September but we are yet to notify the Bill in the gazette to start its enforcement," he said.

The Bill has a provision where both the parties (workers and industry) can end their dispute through compromise called as 'compounding of offenses'.

Under this new system of compounding of offenses, workers can arrive at compromise with the employer without approaching court. For this, government will charge upto Rs 21,000 as penalty from the employer and give 75 percent of that penalty money to the affected employee or employees.

However, this compounding of offenses will be only implemented if both the parties agree to it, as per the Bill.

The Bill says that this provision has been introduced to reduce legal cases. An industrial unit can take benefit of it three times only, it said.

"The state government has considered it necessary to strike a balance of interest between the industries and the workers and create an environment which is conducive for both through this Bill. The Bill has many pro-labour changes also," State Labour minister Vijay Rupani said.

Another contentious provision of the Bill is allowing the state government to prohibit labour strikes in public utility service from the minimum period of six months to one year.

The Bill also reduced the time limit of workers to apply against their dismissal, discharge (industrial disputes) to the labour court or tribunal from three years to one year.

"The Bill has pro-labour amendments also like soon 1.20 crore labourers of Gujarat would get their wages by cheques directly transferred into their bank accounts created under the Jan Dhan scheme," Gothi said, adding that labour reforms are required in the country.

Opposition Congress had, however, termed this Bill as pro-industry and anti-labour. Its members had walked out when it was cleared by the state assembly in February this year.

As per the provisions of new labour bill, factories and other commercial establishments having more than 20 employees have to pay salaries through cheques only.

The Bill also expanded the jurisdiction of Minimum Wages Act by including outsourcing agencies and labour contractors in the purview of the act. By doing so, the agencies have to give salaries to their employees as per the Wages Act.

As a relief to the industry, the Bill has made provision of a four-page form to be submitted for the compliance of various labour laws. This one form will replace a bunch of several forms.

Employees working in large industrial sectors, such as Special Economic Zones, are now entitled to get 60 days of salary if they are laid off by the employer. At present, the limit is 45 days of salary.

In one of the major pro-labour amendments, a provision is made where if a labourer or his relative, by any reason, fails to apply for compensation in case of accident or death within a stipulated time of 90 days, then the state government will file an application on their behalf for compensation.