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India- State Governments' Amendments to Labor Law

India- State Governments' Amendments to Labor Law

State Governments in India have taken initiatives to make amendments to the labour laws in the country to aid economic activity in the country. Considering the pandemic's effect, state governments took an initiative to open up the economy with limited workforce and resources, enough to sustain the business and contribute to the economy's growth.

Now, since the subject of labour laws falls under the ambit of the concurrent list of the Constitution, both the central and the state governments have the authority to introduce laws regulating employment laws in the country. The relevant state can introduce amendments, additions and exceptions by amending federal statutes with the President's permission. This power of the state government to amend the laws through ordinances is possible through Article 213 of the COI.

The Amendments introduced by various states are as follows;

Uttar Pradesh

The UP government has introduced the UP Temporary Exemptions from Certain Labor Laws Ordinance 2020. This ordinance stands applicable to all factories and establishments engaged in manufacturing and exempts these establishments from specific laws for a temporary period of three years subject to certain conditions;

  1. Maintenance of a register wherein the details of all employees shall be entered electronically
  2. The minimum wage prescribed by the UP government shall be mandatorily payable to workers
  3. Workers shall not be required to work for more than eleven hours a day
  4. Payment of wages shall be made through bank accounts only, as prescribed under the Payment of Wages Act, 1936
  5. Provisions related to safety and security of workers continue to be applicable as per the Factories Act, 1948 and Building and Other Construction Workers Act, 1996
  6. Laws relating to the employment of women and children shall continue to be applicable
  7. Compensation shall continue to be payable as per the Employees Compensation Act, 1923
  8. Provisions of Bonded Labor Abolition Act, 1976 shall continue to apply

Himachal Pradesh

The HP government introduced the Contract Labor (Regulation and Abolition) HP Amendment Ordinance, 2020, the Industrial Disputes Ordinance, 2020 and the Factories Ordinance, 2020.

These ordinances are introduced to amend the threshold regarding workers under all the aforementioned Acts and aim to amend the ID Act with respect to its threshold regarding workers and special provisions concerning lay-off, retrenchment and closure of individual establishments; the compensation has been proposed to be increased in case of retrenchment from 15 days' pay to 60 days' pay, further, lockouts and strikes have been prohibited in case of public utility and non-public utility services.

Madhya Pradesh

Two state laws have been amended by introducing the MP Labor Law Ordinance, 2020, namely, the MP Industrial Employment (Standing Orders) Act, 1961 and the MP Shram Kalyan Nidhi Andhiniyam, 1982.

The former applies to entities having up to 50 employees, whose threshold is proposed to be increased to a 100. The latter provides for the Constitution of a labour fund to finance activities for the welfare of labour. The amendment ordinance permits the state government to exempt any establishment or class from the Act's provisions.


Goa has effected an amendment of their labour laws by introducing Contract Labor (Regulation and Abolition) (Goa Amendment) Ordinance, 2020. This amendment increases the threshold of workers as prescribed under the previous Act of 1970. It further provides for the compounding of offences depending on the number of workers employed in the establishment.

The ID Act has also been amended by the introduction of the ID (Goa Amendment) Ordinance, 2020 which intends to lower the limitation period prescribed under Section 2(3), which provides that cases concerned with retrenchment, termination, discharge or dismissal of employees shall be presented before the labour court with a period of three years. The limitation period has been reduced to one year.


The Factories Act, 1948 has been amended by the Factories (Gujarat Amendment) Ordinance, 2020. The amendment increases the threshold of workers under the definition of a factory from 10 to 20 in cases concerned with manufacturing process with the aid of power, and 20 to 40 in matters concerned with manufacturing process without the support of power.

The ID Act has also been amended to make changes to the special provisions concerned with lay- off, retrenchment and closure of certain establishments. Further, the payment of workers' wages in lieu of 3 months prior notice is sought to be removed.





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