With a view to create new opportunities for industrial investment in the State of Gujarat, the Governor has given effect immediate effect to the Contract Labour (Regulation and Abolition) (Gujarat Amendment) Ordinance, 2020 (“Ordinance”) increasing the applicability threshold of the Contract Labour (Regulation and Abolition) Act, 1970 to 50 or more workmen as against the earlier 20.
Now, the Contract Labour (Regulation and Abolition) Act, 1970 in Gujarat will now apply to establishments and contractors which employ 50 or more workmen as opposed to the earlier threshold of 20.
In light of the prevailing situation owing to COVID – 19 pandemic, it is necessary to boost the economic activity by way of offering an economic revival package in the State.
Realising this, the Government of Gujarat felt that the establishments and contractors which employ 50 people or more (previously 20) may be covered under the Act. Also. because of the existing threshold limit, principal employers while hiring personnel or procuring commodities found it difficult to execute contracts, as the small units faced hardship in ensuring formalities under the Act and it was observed that the lower limit either encouraged non-compliance or restricted the engagement of required labour as per demand.
The upward revision in the threshold limit is expected to provide more opportunity of employment and facilitate business in small units.
Source: Governor of Gujarat