Labour Reforms in Rajasthan

Rajasthan State Government has initiated comprehensive labor law reform. The State Government relaxed the Trade Union Act, Industrial Dispute Act, Contract Labour Act, as well as the 1948 Factories Act and 1961 Apprenticeship Act to spur economic development and attract foreign investment.

Key Highlights

  • Industrial establishments employing up to 300 workers are now allowed to retrench employees without seeking prior permission of the Government
  • The threshold of the number of employees required for the purpose of applicability of the Factories Act has been increased from 10 to 20 (in electricity-powered factories) and from 20 to 40 (in factories without power) thereby putting small factories in Rajasthan outside the purview of the Factories Act
  • Membership of 30 per cent of the total workforce needs to be recorded for a union to obtain recognition, up to 15 per cent, a move that will halt productivity losses due to industrial dispute
  • As against the existing threshold of 20 contract labour/workmen, the Contract Labour Act will be applicable only to those establishments and contractors in Rajasthan who employ 50 or more contract labour/workman in the preceding 12 months