Karnataka Makes Hiring, Firing Easier For MSME Units

BENGALURU: The MSME sector has got a big relief as the State Government is all set to notify a set of amendments to its labour laws making it easier for small industrial units to hire and fire employees, and close down in the event of a financial crisis.

The amendments also allow more overtime (OT) hours for workers as well as to rope in workers on a contract basis.

The government has amended Industrial Disputes Act, Factories & Boilers Act and Contract Labour Act, and related regulations to boost the morale of the MSME sector. The regulations earlier required MSMEs to seek government permission to lay off, retrench and close down units if they had 100 employees.

The cap has now been raised to 300 employees so that MSMEs can hire more people without the fear of labour regulations coming in the way later, or close down units in the event of a financial crunch. “The relaxation of labour regulations will go a long way in attracting new investments and encourage industries to hire more,” Labour Minister Shivaram Hebbar told ET. The President, he added, has assented to the Labour ordinances sent by Karnataka, and the government will notify them very soon. Five other states too have made similar changes to their labour laws, he said.

Source: The Economic Times

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