Research Note on Retrenchment1 under ID Act, 1947
25F (B) It means termination of employment by the employer for some specific reasons.
1. These reasons cannot include the following: -
a) Terminated due to disciplinary action
b) Voluntary retirement from service
c) Retirement due to attaining the age of superannuation
d) Termination due to non-renewal of the employment contract
e) Termination due to ill health
2. The reasons for retrenchment
The action for retrenchment taken by the employer may be for any reason as he thinks fit but
should be just and legal.
It can be for the following reasons
a) Economic difficulties
b) Rationalization in the industry
c) Technological changes in the industry
d) Failure of machinery
3. Conditions pre-requisite for retrenchment2
In order to avail such conditions, the employee must be working for more than one year in
such establishment.
The conditions include: -
a) Must give one month prior notice in writing indicating the reason of retrenchment or to
pay wages for the period of such notice on compensatory ground
b) Provide employee with compensation at the time of retrenchment equivalent to 15 day
average pay (for every completed year of continuous service)
c) Provide notice of such retrenchment to the appropriate government.
3.1. Computation of period of 240 days
1
Industrial Disputes Act, 1947, § 2 (oo).
2
Industrial Disputes Act, 1947, § 25-F.
a) Even if there is no ‘continuous’ and ‘uninterrupted’ service for one year within the
meaning of Section 25-F read with Section 25-B(1) because of an illegal strike by
workmen, the workmen would be entitled to the benefits of Section 25-F, if even
after excluding the period of the illegal strike, the number of days during which the
workman actually worked under the employer was more than 240 as contemplated
by Section 25-B(2)(a)(ii).3
b) The period of 240 days has to be counted from the date of joining even though it was
on an ad hoc basis and not from the date of regular recruitment.4
c) Sundays should be counted as actual working days for the purpose of calculating 240
days.5
d) Onus to prove 240 days of continuous service lies on the workman.6
e) Section 25-F is applicable to ad hoc temporary employees also, if they have worked
for more than 240 days in a year continuously immediately preceding the order of
termination of service.7
3.2. Illegality or irregularity in the process of appointment cannot be a ground to refuse
to follow the provisions of Section 25-F8
3.3. Retrenchment without complying with Section 25-F would be void ab initio. Such
action would entitle the workman to a declaration for continuation in service with
full back wages.9
3.4. Conditions precedent for retrenchment — Mandatory or directory in nature .
There is nothing to indicate that Section 25-F(c) was intended to be directory while the
other two sub-sections of the same section were mandatory in nature. Section 25-F(c) is
a condition subsequent, but is still a mandatory condition required to be fulfilled by the
employers before the order of retrenchment of the workman is passed.10
3
Standard Motor Products of India v. A. Parthasarathy, (1985) 4 SCC 78
4
Haryana State Electricity Board v. Randhir Singh, Assistant Lineman, (1994) 1 LLJ 1120
5
Ram Kishan Gurjar v. State of Rajasthan, 2006 Lab IC 56 (Raj) (DB)
6
Haryana State Coop. Supply Mktg. Federation Ltd. v. Sanjay, (2009) 14 SCC 43
7
Umesh Saxena v. Labour Court, (1993) 1 LLN 809 (All)
8
Srirangam Coop. Urban Bank Ltd. v. Presiding Officer, Labour Court, (1996) 2 LLJ 216
9
Mohan Lal v. Bharat Electronics Ltd., (1981) 3 SCC 225
10
Raj Kumar v. Director of Education, (2016) 6 SCC 541.
The contradicting opinion is that the notice of retrenchment to be sent to appropriate
Government or notified authority, is only directory and not mandatory11
3(A). Conditions precedent to retrenchment of workmen in establishments employing
more than 100 employees (more than 300 employees in the State of Karnataka)12
a) Working for more than a year in continuous service
b) Must give three month prior notice in writing indicating the reason of retrenchment or
to pay wages for the period of such notice on compensatory ground
c) Prior permission of such retrenchment must be taken from the appropriate
government (the application for such permission must be made in the prescribed
manner)
d) After giving reasonable opportunity of being heard to both the parties and taking into
consideration the genuineness of such retrenchment and interest of workmen, the
government will grant the said permission.
e) The government must convey the said order in the span of 60 days from the date of
application to the employer.
f) The order of the appropriate government must be final and binding.
g) The appropriate government either on its own motion or on the application made by
the employer or any workman, review its order granting or refusing to grant
permission and can refer the matter to a Tribunal for adjudication. (must pass an
award within thrity days)
h) Provide employee with compensation at the time of retrenchment equivalent to 15
day average pay (for every completed year of continuous service).
4. Procedure of Retrenchment13
Principle of “Last come, first go” is usually applied by establishments to retrench employees
and not to get challenged on the basis of discrimation in the court of low unless the employer
wishes otherwise due to certain reasons14
Conditions that must be fulfilled in order to use this principle are: -
11
Manju Saxena v. Union of India, (2019) 2 SCC 628
12
Industrial Disputes Act, 1947, § 25-N
13
Industrial Disputes Act, 1947, § 25-G
14
Workmen v. Jorhaut Tea Co. Ltd., (1980) 3 SCC 406
a) Must be a workman
b) Engaged in an industry
c) Citizen of India
d) Belongs to a particular category in the establishment
e) Absence of any agreement between the employer and the workman in this behalf
The provisions of Section 25-G are directory but a departure from the principle of last come first
go can be made only for sufficient grounds15
Every woman, during her pregnancy, needs rest and care and should be withdrawn from
employment. Thus, maternity benefits are to be provided to them by the employers to restrain
them from work burden and spend quality time with their children once they are born
We deal with the status of maternity benefits provided for surrogacy to commissioning mother,
maternity benefits under gestational surrogacy and maternity benefits to adoptive mother.
Extended parlance is also given to the need of paternity benefits, relationship between morality
and surrogacy, case analysis of Dr. Hema Vijay vs. State of Maharashtra, and key changes
regarding maternity benefits in the new, Chapter VI of Social Security Code, 2020.
15
G. M., Northern Rly., New Delhi v. Judge, Central Industrial Tribunal, (1992) 1 Lab IC 678
