Gujarat's labour law exemption Ordinance sent for President's assent

Companies set up within a year of the law coming into effect will be eligible for exemption from almost all the labour laws for 1,200 days

Gujarat governor Acharya Devvrat has approved an Ordinance exempting new businesses being set up in the state from almost all the labour laws for a period of over three years.

A top state government official said that the Governor’s nod to the draft Ordinance came earlier this week and it has now been sent for President Ram Nath Kovind’s assent on Wednesday.

The Bharatiya Janata Party (BJP)-ruled state government has followed a slightly different model from that of Uttar Pradesh.

The Gujarat government's Ordinance will apply to all new units in the services and manufacturing sectors for a period of 1,200 days. In case of Uttar Pradesh, the Ordinance was proposed to be applicable to all manufacturing and related units that hired “new employees”, which means existing firms, and all new companies being set up in next three years.

“We didn’t want to create a differentiated regime within the same companies. That would have been unfair. So, we have taken a decision to apply the proposed law to only new establishments,” a Gujarat government official said, requesting anonymity.

Companies that set up within a year of the law coming into effect will be eligible for exemption from almost all the labour laws for a period of 1,200 days, according to the draft Ordinance.

Kovind will seek the opinion of the Union home and labour ministries before taking a decision on the draft Ordinance. Since labour is a concurrent subject under the Constitution of India, states can frame their own laws but need the approval of the Centre for making amendments to central laws.

The UP government’s ordinance, which was also approved by its governor Anandiben Patel, has also been sent for the approval of the President earlier this week.

In Gujarat, the new firms will be exempt from all labour laws, except the Minimum Wages, Act, the Employee Compensation Act and safety-related rules in factories.