On account of the economic impact of COVID-19, the Karnataka state government notified an ordinance on July 31, 2020, amending three major labour law legislations.

Industrial Disputes Act, 1947
• Sections 25K (1) and (1A) – no prior permission of the state government will be needed to lay off or retrench, or close an industry, if the workmen employed are less than 300 (from 100 previously).

Factories Act, 1948
• The proviso to Section 65 – the overtime limit per quarter has been increased from the existing threshold of 75 hours to 125 hours.
• The definition of the term, “factory,” under Section 2(m)(i) – factories that use power and hire less than 20 workers and factories that do not use power and higher less than 40 workers can operate without government approvals.

Contract Labour (Regulation and Abolition) Act, 1970
• Section 1(4)(a) – establishments employing up to 50 contract laborers are exempt from seeking licenses under this law

Trade unions are calling this Ordinance as detrimental to the interests of labourers. However, the government is highlighting this Ordinance as a step towards helping the ease of doing business in Karnataka. This Ordinance will surely simplify the compliance burden on small and mid-sized industries in the state.