Introduction of the Factories (Gujarat Amendment) Ordinance, 2025 for promotion of ease of doing business

At a glance

• The Factories (Gujarat Amendment) Ordinance 2025 (Ordinance) is now in effect, introducing significant amendments to the Factories Act 1948 (Factories Act), as applicable in Gujarat.
• The amendments seek to provide operational flexibility to factories to promote ease of doing business.
• Key reforms include inter alia increased daily work hour limits, extended spread over of working hours, revised overtime wage rules, and new provisions for women’s night shift employment, under strict safety conditions.
• The Ordinance aims to enhance business growth and support employment activities.  

The Gujarat state government can now undertake the following under the Ordinance:

• Daily working hours: Extend the daily maximum work hours from the previous nine hours to up to 12 hours (inclusive of rest intervals), subject to (1) a weekly cap of 48 hours; (2) written consent of the worker; and (3) the remaining days in the week to be paid holidays for that worker.
• Rest intervals: The mandatory rest interval of half an hour, previously required after five hours of work can now be deferred until after six hours of work, for any group or class of factories, providing greater flexibility in shift structuring.
• Spread over of working hours: Enhance the permissible ‘spread over’ ie, total duration of a worker’s day, including rest intervals, from the earlier 10.5 hours to 12 hours a day, including rest intervals.
• Overtime wages: Under the Factories Act, a worker working for more than nine hours in a day or for more than 48 hours in a week, is entitled to overtime wages for the overtime hours of work performed, at the rate of twice their ordinary rate of wages. The Ordinance now revises these conditions as: (1) for a five-day work week, overtime wage is payable for work exceeding ten hours in a day or 48 hours in a week; (2) for a six-day work week, the threshold remains at nine hours per day or 48 hours per week; and (3) for a four-day work week, overtime is payable for work exceeding 11.5 hours in a day.
• The overall overtime limit has also been increased. The state government may now provide exemption to working hours, by permitting up to 125 hours of overtime per quarter (previously 75 hours), subject to written consent from the worker.
• Employment of women in factories during night shift: The Factories Act generally restricted women from working in factories between 7pm and 6am. Now, state government can exempt factories or groups of factories from this restriction subject to compliance with conditionalities including: (1) employer’s duty to prevent sexual harassment and provide redressal mechanisms; (2) provisions for appropriate working conditions, including health and hygiene; (3) adequate lighting and CCTV coverage (with footage retained for at least 45 days) in and around the factory; (4) women to be employed in batches of at least ten, with sufficient women security at entry / exit points; (5) sufficient rest rooms for female workers; and (6) secure transportation facilities with female security guards, CCTV, and GPS, for night-shift women employees, from their residence and back.
• Change of shift: Shift changes for women can only occur after a weekly or other holiday, ensuring adequate rest and safety.

The Ordinance marks a significant step towards greater operational flexibility for factories in Gujarat, with the dual aim of stimulating economic growth and safeguarding worker welfare. Employers of factories in Gujarat must update their compliance frameworks to align with the new provisions, particularly regarding work hours, overtime, and employment of women in night shifts.