Punjab to amend Industrial Disputes Act to improve ease of doing business

Chandigarh, Dec 4 () Ahead of the two-day Progressive Punjab Investors Summit, the Punjab Cabinet on Wednesday approved several amendments to the Industrial Disputes Act, 1947, with an aim to 'boost ease of doing business'.

The amendments relate to sections 2A, 25K, 25N and 25-O, a state government release said.

Currently, there is no time limit for raising an industrial dispute before a conciliation officer and its reference later to the labour court under Section 2A of the Act.

The amendment to section 2A would now provide a time limit of three years, so that stale matters are not agitated after lapse of a certain time, the release said.

Section 25K of the Act provides that the provisions of Chapter VB of the Industrial Disputes Act, 1947 get attracted when any industrial establishment employs 100 or more workers.

Any entity within the ambit of chapter VB has to take prior approval from the state government before closing down the industry, lay off, retrenchment or lock-out.

However, with the amendment to the section, the provisions of chapter VB shall be attracted only when at least 300 workers are employed in the factory, the release said.

Further, Section 25 N of the Act states that prior approval of the state government should be obtained, besides complying with other conditions, before retrenching an employee.

The management has to give three months' notice or three months' wages in lieu thereof for retrenching any employee.

It was felt that three months' notice be made mandatory and extra three months' wages be paid to the worker before retrenchment by amending section 25N (1)(a) and clause 9 of section 25N of the Act.

Notably, the Punjab government is organising investors summit starting Thursday and the event will see participation from micro, small and medium enterprises, apart from leading industrialists, new-age entrepreneurs, foreign missions and other dignitaries.

According to Section 25-O, before closing an industry, the management has to get approval from government and workers are compensated by paying 15 days' pay for every completed year of service.

"The existing sub-section(8) of Section-25-O stipulates that where an undertaking is permitted to be closed down under sub section (2), or where permission for closure is deemed to be granted under sub section (3), every workman who is employed in that undertaking immediately before the date of application for permission under this section, shall be entitled to receive compensation, which shall be equivalent to 15 days' average pay for every completed year of continuous service or any part thereof in excess of 6 months," the release said.

The governments of Andhra Pradesh, Haryana, Gujarat, Madhya Pradesh, Uttar Pradesh, Maharashtra, Uttarakhand and Rajasthan have already amended sub section (8) of 25-O to provide additional wages for three months, besides providing above mentioned compensation to the workers.

It was felt that this may provide more financial security to the workers in the event of closure of the industry, and therefore Sub section (8) of Section 25-O has been amended on the lines of Rajasthan government, the release added. CHS VSD RVK