GUJARAT

LABOUR REFORMS

The Government strongly feels that conducive labour environment both in terms of availability of skilled labour force at various levels and also a favorable legislative framework will be very essential for the achievement of the vision.

Government of Gujarat also appreciates and acknowledges the fact that rules, regulations and procedures serve as guidelines for channelising efforts appropriately in the right direction and that it by no means should become an instrument for hindering the industrial growth. Thus, an effort would be mobilized in the direction of reviewing and simplifying the existing rules. With a view to increasing transparency in the system of inspection and to enable the entrepreneurs to focus on the core issues of business, a bold step by advocating the system of self-certification has been contemplated. Labour reform process would be incomplete without addressing the issue of unemployment. Hence, the Government plans to encourage private labour exchanges also.

Simplification of Rules and Procedures

The Government is committed to bring about reforms in the matter of labour laws. As far as the state labour laws such as BRU Act, BIR Act, Bombay Shops and Establishments Act, etc. are concerned, a committee will be formed to reassess the relevance of these Acts in the changing environment. The Labour Dept. itself is already considering amendments suo-moto in many provisions.

Development Visits

The Labour Dept has already initiated an exercise of rationalizing all the inspections carried out by inspectors under its control, e.g. Labour Officer, Factory Inspector, Boiler Inspector, Employment Officer, Apprenticeship Adviser, etc. The Labour and Employment Dept also held a series of seminars on the activities of all the wings under its control to explore ways of synergising within its overall resources. Instead of each wing operating in isolation to enforce various laws within its sphere of responsibility, it has been decided to form joint teams representing members from all the regulatory and non-regulatory wings to represent the department as a whole. The visits by these teams are called Development Visits wherein a combined team of officers from all the wings would visit various units. The participating officers will be Principal of local ITI, Employment Officer, Apprenticeship Advisor, Factory Inspector, Labour Officer and Boiler Inspector. This would reduce the inconvenience caused to the industrial units in dealing with each of them separately. The plan of the visit which will take place only once a year will be decided by the regional heads of Labour Commissionerate and the Directorate of Employment & Training in consultation with the local Chamber of Commerce and Industry for transparency. The purpose of the visit is not to aggressively inspect but to exchange information about what the local ITI has to offer to the industry, popularise free access to online database of jobseekers available, persuading the units to use apprenticeship seats allotted, offering advanced training to the workers of the units in AVTC as well as HTTC, arranging in-plant training for ITI trainees, offering guidance about compliance of labour laws, etc. The department would also offer them to comply if violations of labour laws have taken place unintentionally, and would recommend stricter action in case of deliberate violations. Enforcement of industrial safety related laws would however continue to be strict as there cannot be any flexibility to mitigate any possible industrial disasters. The officers of Labour & Employment Dept would thus visit the units as friends and guides.

Annual Consolidated Return

One of the often-repeated complaints received from the industries is the need for compliance of a plethora of legal provisions and filling of returns. The Labour Dept. had prescribed an Annual Consolidated Return to be filed. This is in place since last one year or so. The Government has agreed to rationalise the approach to inspection. Very large units have necessary resources to bear the cost of implementation of labour laws. Such large units therefore may be visited only once a year and their Annual Consolidated Return should suffice. So far as the small and medium enterprises are concerned, the GoI has already circulated a bill with a clause of Self-Certification. The Government also plans to introduce inspection once a year in respect of small and medium enterprises also.

Flexibility in Labour Laws in the SEZs/ Industrial Parks

The Government of Gujarat has recently promulgated an ordinance for setting up SEZs and Industrial Parks. As per the provision of this ordinance, certain flexibilities in the compliance of labour laws under sections V(a), V(b), V(c) and V(d) of Industrial Disputes Act have been offered. The industrial units and parks which would create necessary amenities and facilities for their workers as also taking care of other provisions of these sections will be exempted from filing the returns as per the requirements of Labour Dept on the basis of self-certification.

Other Innovative Steps Proposed

The Government also plans to initiate certain innovative steps like:

• In each estate, a panel will be placed on which the units can paste their requirements for labourers. A unit desirous of pasting its requirement on the board will be allowed a maximum period of seven days presence on the board. This initiative will help in bringing closer a pool of labourers with a variety of skills and the units desirous of engaging laborers with specific type of skill.



• The Directorate of Employment & Training is collecting the information from the industries about their requirements of manpower and the same is placed on their website. A system of online registration by the unemployed youth is also in place.



• The Boiler’s Act will be modified in order to reduce the frequency of inspection from once in a year to once in four years depending upon the technical specifications of the boiler.



• The Government appreciates that outsourcing has come to stay as an integral part of global business activity. In order to facilitate cost effective management, outsourcing through liberal enforcement of Contract Act would be considered.

Self-Certification: A step in the direction of abolition of Inspector Raj

The concept of self-certification would be put in place for all technical parameters, by individual industrial units as required under various laws and statutes. In order to save an industrialist from having to go through various types of inspections for different provisions of law, a Single Business Act would be considered for introduction. The Single Business Act is intended to encompass the essence of almost all the basic laws of relevance to industries under one umbrella. For the purpose, a pool of private agencies with experts in the relevant fields would be accredited to carry out the task of inspecting particular units and issue necessary certificates as required by law. A joint team of Government inspectors from different departments however, will inspect the unit once in a year only. Stiffer penalties would be imposed for the abusers as well as accredited agencies issuing fake certificates including cancellation of licences. The system of self-certification would be a win-win situation for Government as well as the industries, as for the former it will ensure more transparency in the system and for the latter, it would be a case of professional inspection practices at reasonable intervals of time. An Inter-departmental Committee under the chairmanship of Hon’ble Minister for Labour will be constituted to implement this concept, in a time bound manner.

Summarizing the above, following initiatives are under consideration of the Government to provide necessary comfort to the industries.

1. Introduction of Single Business Act to simplify rules and procedures
2. Introducing the concept of self-certification and audit principle by accredited consultants and severe penalties for willful defaulters.
3. Confining to only one comprehensive visit annually, by Government official(s) who are identified on the basis of the scale of operation of the unit.