14. Retrenchment (Sec.

2 (oo)]
• It means the discharge of surplus labour or staff
• By the employer for any reason
• It does not include the following -
1. Voluntary retirement ;
I
2. Retirement of workmen on reaching the age of
superannuation ;
3. Termination of service of the workman as a result of non
renewal of the contract.
4. Continued ill-health.
• Termination of the service of workmen when the business ceases to exist
• Is not included within the meaning of the definition.
• In the followin1 cases termination of services amounted to retrenchment.
1. Discharge of a workman on the ground of his failure to pass confirmation test
2. Termination of service for unauthorized absence from duty
3. Termination of service on account of recession and reduction of volume of work.
4. Termination of service of probationer of unsuitability
5. Compulsory retirement of a workman amounting to termination of services
 RETRENCH
EMPLOYER -----------"? WORKMEN
IMMEDIATELY

Must pay wa1es for the period of NOTICE

t
MANDATORY
2. RETRENCHMENT WORKMAN
• 15 Days average pay
• For every completed year of
service
• Provided it exceeds 6 months

3. NOTICE APPROPRIATE GOVERNMENT/SPECIFIED

Prescribed AUTHORITY
manner
• RETRENCHMENT w it h o
u t co m p ly in g w it h
th e se
conditions w o u ld be Voi
• This section is n o t a
d a b initio
pplicable to a CLOSED
o r DEAD
INDUSTRY

SECTION (25-G)
PROCEDURE FOR RETREN
CHMENT
Recotnlses the well kno
wn PRINOPLE o f RETRE
NCHMENT
i.e. "First come ; Last go' o
r 'Last come ; First go"
 MANAGEMENT MUST ACT FAIRLY

Retain the Retrenched the

employees senior on the basis of
possessin1 special irregularity or
qualification inefficiency
\ SOUND & VALID REASON j

SECTION (25·H)
RE-EMPLOYMENT OF RETRENCHED WORKMEN,
Employer wants to re-employ any person

Obligation to give a first preferenee to the retrenched workmen

Does not confer any right to secure employment on his previous terms & conditions of service
 SECTION (25-FF)
COMPENSATION TO WORKMEN IN CASE
OF TRANSFER OF UNDERTAKING

UNDERTAKING

Worker is entitled to
• NOTICE
• COMPENSATION
• As per SECTION 25-F
To pt compensation followln1 conditions must be satisfied

WORKMAN should have

TRANSFER takes place either UNDERTAKING should be been in CONTINUOUS
by AGREEMENT OR BY INDUSTRY within the SERVICE for 1 YEAR
OPERATION OF LAW meaning of SECTION 2(j) immediately before the
transfer of the undertaking
 BUT no compensation arises In the

~
followln1 3 conditions

~
.cf
·, .·A
\ I,•

..
N ...........
.... -0 '

M· NO TERMS& ("'() NEW EMPLOYER

INTERRUPTION CONDITIONS should be under
of service by under the new a LEGAL
such transfer management LIABILITY to pay
compare to the workman,
favourably with in the event of
the old ones subsequent
retrenchment
compensation
 SECTION (2S·FFA)
60 DAYS NOTICE TO BE GIVEN OF INTENTION
TO CLOSE DOWN ANV UNDERTAKING

EMPLOYER ------.-1---~>
ESTABLISHMENT
CLOSE DOWN

APPROPRIATE
NOTla GOVERNMENT
• PRESCRIBED MANNER
• CLEARLY STATING THE REASON
• ATLEAST BEFORE 60 DAYS

This section does not apply to an undertaking where

• > SO workmen are employed or;
• > SO workmen were employed on an AVERAGE per working day in the preceding 12 months
• Undertaking is setup for the construction of buildings; bridges; roads ; canals; dams or
other projects.
APPROPRIATE GOVERNMENT -Establishment -
Ex em pt- Fro m the requirement of NOTICE.
EXCEPTIONAL CIRCUMSTANCES
1. Accident in the und ert aki ng OR
2. DEATH of the em plo yer
For SPECIFIED PERIOD
EMPLOYER ON VIOLATION

IMPRISONMENT FINE
UPTO & MONTHS UPTO RUPEES. 5000

BOTH