Professional Documents
Culture Documents
Change of The Nature of The Proposed Change: 3. Discuss The Provision Contemplated Chapters 5B of The ID Act
Change of The Nature of The Proposed Change: 3. Discuss The Provision Contemplated Chapters 5B of The ID Act
And then there is section 9A, one of the most restrictive of labour laws. It mandates that every
employer who wishes to make any change in the conditions of service concerning any matter
employment of the workers for a short period. Retrenchment refers to a situation where the
The Model Standing Orders allow the industrial establishment to implement shift working,
i.e., more than one shift may be worked in a department or departments or any section of a
Chapter 5B of the Industrial Disputes Act, 1947 (Sec.25K) denotes that the Provisions of
this Chapter shall apply to an industrial establishment in which not less than 100 workmen
were employed on an average per working day for the preceding 12 months. Sec. 25N of the
I.D. Act falls under the said Chapter VB which denotes about condition precedent to
retrenchment of workmen. Before actually getting into the conditions precedents and
condition subsequent for retrenchment of workmen, let us discuss the very important aspect
i.e. procedure for retrenchment as laid down under Sec.25G of the I.D. Act, 1947.
between the employer and workman in this behalf, employer shall ordinarily retrench the
workman who was the last person to be employed in that category, unless for the reasons
The above Section states about the rule of Last Come First Go - the Act permits an employer
to affect retrenchment of workman in his industrial establishment but there are certain
The above section also prescribe certain conditions to be satisfied by an employee before he
1. The person claiming protection of this Section should be a workman within the
establishment and
5. There should be no agreement between the employer and the workman contrary to
These conditions should be cumulatively satisfied i.e. even of any one of these
requirements is lacking, the provisions of this Section will be of no avail. The procedure,
therefore, has been hedged with several cautions and safe guards. The procedure of first
come last go or last come first go denoted under Sec.25(G) should normally be adhered to,
where the exigencies of an industry so demand, the procedure can be departed from. The
only requirement the Sec., requires is that in case of departure from this procedure is that
The doctrine of last come first go has to be borne in mind with respect to different
categories of workmen working in an industrial establishment and not to the whole of the
industrial establishment. There is, however, a clear distinction between a class or category
and grade. The class or category is a group in which posts of particular description are
included and the grade as referred exclusively to scales of pay. The word 'category' as
mentioned in Sec.25G is therefore not synonymous with grade. The category means a class
Departure from the rule of Last come First Go : In case an employer wants to depart
from this rule, he is bound to record valid and sufficient reasons for the same. In other
words, this rule is not inflexible and extraordinary situations may justify variations. For
instance, "a junior recruitee who has a special qualification needed by the employer may be
1. an industry
For our consumption, Item Nos.4 & 5 are of relevance. Sec.25G makes it clear that the Unit
'industrial establishment'. The provision insist on the rule being applied category-wise that
is to say, those who fall in the same category shall suffer retrenchment only in accordance
with the principle of last come first go. The obligation of the section will operate not only
within the limitation of the establishment in which retrenchment is to be made but also
within the added limitation of the category to which the retrenched workmen belong.
However, the Hon'ble High Court of Bombay in the case of Tulsidas Khimji V/s. F.
Jeejeebhoy (1961) I LLJ 42 has laid down the test to determine whether in a given case
i) Have the employers recruited the workmen on the basis that they belong to one
ii) Can the employment of a clerk be regarded as employment in a single category of clerks
iii) Are the different departments functionally integrated or by reasons of the condition of
transferability or seniority amongst the clerical cadre, can the departments be treated as
Therefore, it is mandatory on the part of the employer that the procedure indicated in
who has been in continuous service for not less than one year under an employer shall be
a) the workman has been given three months notice in writing indicating the
reasons for retrenchment and the period of notice has expired, or the
workman has been paid in lieu of such notice, wages for the period of notice
and
2) An application for permission under Sub-sec. (1) shall be made by the employer in the
prescribed manner stating clearly the reasons for the intended retrenchment and a copy of
such application shall also be served simultaneously on the workman concerned in the
prescribed manner.
3) Where an application for permission under sub-sec. (1) has been made, the appropriate
government or the specified authority, after making such enquiry as it thinks fit and after
giving a reasonable opportunity of being heard to the employer, the workman concerned
and the persons interested in such retrenchment, may, having regard to the genuineness
and adequacy of the reasons stated by the employer, in the interest of workman and all
other relevant factors, by order and for reasons to be recorded in writing, grant or refuse to
grant such permission and a copy of such order shall be communicated to the employer
4) Where an application for permission has been made under Sub-sec.(1) and the
appropriate government or the specified authority does not communicate the order
granting or refusing to grant permission to the employer within a period of 60 days from
the date on which such application is made, the permission applied for shall be deemed to
to grant permission shall, subject to the provisions of sub-section (6), be final and binding
on all the parties concerned and shall remain in force for one year from the date of such
order.
6) The appropriate government or the specified authority may, either on its own motion or
on the application made by the employer or any workman, revive its order granting or
refusing to grant permission under sub-sec.(3) or refer the matter or, as the case may be,
Provided that where a reference has been made to a Tribunal under this Sub-section, it
shall pass an award within a period of 30 days from the date of such reference.
7) Where no application for permission under sub-sec.(1) is made, or where the permission
for any retrenchment has been refused, such retrenchment shall be deemed to be illegal
from the date on which the notice of retrenchment was given to the workman and the
workman shall be entitled to all the benefits under any law for the time being in force as if
9) Where permission for retrenchment has been granted under sub-sec.(3) or where
who is employed in that establishment immediately before the date of application for
permission under this Sec., shall be entitled to receive at the time of retrenchment,
compensation which shall be equivalent to 15 days average pay for every completed year
1. The employer has to decide and identify to retrench the workmen in various
may be. The notice for permission for retrenchment to be given by an employer
under Clause (b) of sub-section (1) of Sec.25N of the Act is to be given in form P-A
3. Once the application is made for permission, employer should wait till the
permission is given or the period of 60 days from the date of making the application
has expired when the permission will be deemed to have been granted.
the employer to give such notice to the workmen, after taking the decision to
notice.
5. Apart from giving such notice or paying wages in lieu of the notice, the employer is
These are the mandatory conditions precedent to a valid retrenchment. In other words,
non-compliance of these requirements will render the retrenchment illegal and in-
operative in law and the workmen shall be entitled to all the benefits which they are
or the specified authority is vested with the power to grant or refuse to grant the
permission to the employer to retrench the workman. But before granting or refusing to
i) the employer;
3) consider -
i) the genuiness and adequacy of reasons stated by the employer,
The powers vested in the appropriate Government by this sub-section are not purely
objective consideration of the relevant facts after affording an opportunity to the parties
concerned (I).