Labour law in Gujarat, also known as employment laws and regulations govern how establishments function and address the legal rights, restrictions, and conditions of laborers while maintaining a fair relationship between the employer and employee. In this blog, we will look at the various acts and rules that need to be followed to maintain compliance with labour law in Gujarat.
In Gujarat, there are several rules and acts that cover the laws’ applicability and compliance, such as the Shop and Establishment Act, Payment of Wages Act, Employees State Insurance Act, Employee Provident Fund Act, and others.
Below, you will find detailed information about the labor laws in Gujarat.
Labour Law, Compliances, and Applicability in Gujarat
If you are starting or planning to start a business in Gujarat, complying with the state’s labor laws is essential.
Following are the acts that are classified under certain heads –
An act aims to regulate the employment of contract labour in certain establishments and provides for its abolition in certain circumstances and for matters connected with it.
Applicability – It applies to all establishments and contractors who employ 20 or more workers as contract labour, unless exempted by the appropriate government.
- Form I – Certificate of registration for the establishment from the registering officer appointed by the appropriate government.
- Form IV – The contractor has to obtain a license from the licensing officer appointed by the appropriate government.
- Form VI-B – The principal employer has to submit a return in Form VI-B to the inspector within 15 days of commencement or completion of each contract.
- Form XII – Maintain a register of contractors.
- Form XIII – The contractor has to maintain various registers and records.
- Form XVII – Register of wages-cum-muster roll.
- Form XIX – The contractor has to issue wage slips to each workman.
- Form XX – Register of deductions for damage or loss.
Employee’s Compensation Act, 1923
This act aims to provide compensation to employees and dependents for accidental injuries resulting in death or disablement during employment.
Applicability – The Employees’ State Insurance Act applies to employers who hire workers listed in Schedule II of the act and to employees recruited for work abroad by an Indian company or vehicle.
Industrial Disputes Act 1947
This act provides a framework for resolving industrial disputes and regulating aspects of industrial relations, including authorities, conciliation, arbitration, strikes and lockouts, employer and employee rights, layoffs, retrenchment, and closure.
Applicability – It applies to certain establishments and corporations specified in the act, such as the LIC, the ONGC, and others.
- Form A – Certificate of registration for the establishment from the registering officer appointed by the appropriate government.
- Employers need to report any industrial disputes to the conciliation officer within 15 days. Also, submit annual returns that detail the number of disputes and compensation paid during the year.
- The employer has to maintain a notice board at a conspicuous place in his premises, stating clearly that he is liable to abide by the provisions of this act and the rules made thereunder.
This act ensures a basic standard of living for workers and prevents employer exploitation. The government can set minimum wage rates for different worker categories and establish authorities to enforce the act. Non-compliance with the act leads to penalties.
For more details about minimum wages in India, click here.
Applicability – It applies to all industries and employment and includes provisions for fixing overtime wages and working hours.
Factories Act, 1948
An act governs the working conditions, health, safety, and welfare of factory workers while also prohibiting exploitation, misconduct, and accidents in the workplace.
Applicability – It is applicable to all factories and employment with or without aid of power.
- Form 2 – The factory owner has to obtain a license for the factory from the Chief Inspector of Factories or his authorized office.
- The factory owner must report any accidents or dangerous occurrences on their premises to the Chief Inspector of the Factories within 15 days.
- The factory owner must provide social security coverage to all workers under the Employees’ State Insurance Act, 1948, and the Employees’ Provident Funds and Miscellaneous Provisions Act, 1952.
- Employers must limit workers to nine hours per day or 48 hours per week. Overtime work should be paid double the regular rate.
An Act provides for the payment of bonus to persons employed in certain establishments and for matters connected therewith.
It aims to ensure a fair share of profits to the employees and to prevent exploitation by employers. Click on Payment of Bonus Act for more details.
Applicability – The act applies to every factory and establishment that employs not less than 20 persons on any day during the accounting year.
- The employer has to obtain a registration certificate from the competent authority within 30 days of becoming liable to pay bonus under the act.
- The employer has to file returns and pay the bonus within eight months from the close of the accounting year.
- Employees are eligible to receive a bonus under the act if they have worked for at least 30 working days in an accounting year and have drawn a salary or wage up to Rs. 21,000 monthly.
Payment of Gratuity Act, 1972
An act provides a gratuity to employees who have completed at least five years of continuous service in certain establishments.
The act was extended to the whole of the State of Gujarat after its formation in 1960.
For more details, click on the Payment of Gratuity Act, 1972.
Applicability – It is applicable all over India.
The Profession Tax Act, also known as the Gujarat State Tax on Professions, Trades, Callings, and Employment Act of 1976, was enacted to impose taxes on different professions, trades, callings, and employment in the state of Gujarat.
Applicability – This Act applies to the entire state of Gujarat.
|Monthly Income||PT Amt (PM)|
Click on PT for more details.
The act ensures that men and women receive equal pay for equal work and prohibits discrimination against women in employment on the basis of gender. The act also covers related matters and incidental issues.
Applicability – It applies to the entire country of India, with the exception of Jammu and Kashmir.
To know more details about the Equal Remuneration Act 1976, click here.
The Gujarat Shops and Establishments Act, 2019, and Rules, 2020 apply to all shops and commercial establishments in Gujarat. The act is enacted to protect employees’ rights, covering regulations on wages, work hours, rest intervals, service terms, overtime work, opening and closing hours, closed days, holidays, leaves, benefits, work conditions, child employment rules, and record maintenance.
The provisions of this act, except section 7, apply to shops and establishments with 10 or more workers, and section 7 applies to those with fewer than 10 workers.
Applicability – It is applicable for all over Gujarat.
|Types of Leave||Maximum Carry Forward||Leave entitlement|
|SL (Sick Leave)||NA||7 days|
|EL (Earned Leave)||63||After 240 days of continuous service 18 days|
|CL (Casual Leave)||NA||7 days|
|Max Over Time hr||100 or 120 hrs in a 3 months|
|Normal working hr||9 hr in a day and 48 hr in a week|
|Spread over hr||10.5 hr in a day|
|Interval hr||After 5 hr of work half hr of break|
There are additional laws that apply within the state of Gujarat.
- Inter-state Migrant Workmen (Reg. of emp. And condition of service) Act, 1979
- The Bedi and Cigar Workers (Condition of Employment), Act 1966, and Rules 1968
- Gujarat Trade Union Act, 1926, and Regulation 1963
- Child Labour (Prohibition and Regulation) Amendment 2020
This is the end of our discussion on Labour law in Gujarat . Let us know your other questions and opinions on this topic. Mention below the comment box.