IRC 2 (ZR) "WORKER" means any person (except an apprentice as defined under clause (aa) of section 2 of the

Apprentices Act, 1961) employed in any industry to do any manual, unskilled, skilled, technical, operational,
clerical or supervisory work for hire or reward, whether the terms of employment be express or implied, and
includes working journalists as defined in clause (f) of section 2 of the Working Journalists and other Newspaper
Employees (Conditions of Service) and Miscellaneous Provisions Act, 1955 and sales promotion employees as
defined in clause (d) of section 2 of the Sales Promotion Employees (Conditions of Service) Act, 1976, and for the
purposes of any proceeding under this Code in relation to an industrial dispute, includes any such person who has
been dismissed, discharged or retrenched or otherwise terminated in connection with, or as a consequence of,
that dispute, or whose dismissal, discharge or retrenchment has led to that dispute, but does not include any such
person—
(i) who is subject to the Air Force Act, 1950, or the Army Act, 1950, or the Navy Act, 1957; or
(ii) who is employed in the police service or as an officer or other employee of a prison; or
(iii) who is employed mainly in a managerial or administrative capacity; or
(iv) who is employed in a supervisory capacity drawing wages exceeding eighteen thousand rupees per
month or an amount as may be notified by the Central Government from time to time:

Provided that for the purposes of Chapter III (trade unions), "worker"—
(a) means all persons employed in trade or industry; and
(b) includes the worker as defined in clause (m) of section 2 of the Unorganised Workers' Social Security Act, 2008.

IDA 2(S) “WORKMAN" means any person (including an apprentice) employed in any industry to do any manual,
unskilled, skilled, technical, operational, clerical or supervisory work for hire or reward, whether the terms of
employment be express or implied, and for the purposes of any proceeding under this Act in relation to an
industrial dispute, includes any such person who has been dismissed, discharged or retrenched in connection with,
or as a consequence of, that dispute, or whose dismissal, dischasrge or retrenchment has led
to that dispute, but does not include any such person--
(i) who is subject to the Air Force Act, 1950 (45 of 1950), or the Army Act, 1950 (46 of 1950), or the Navy
Act, 1957 (62 of 1957); or
(ii) who is employed in the police service or as an officer or other employee of a prison; or
(iii) who is employed mainly in a managerial or administrative capacity; or
(iv) who, being employed in a supervisory capacity, draws wages exceeding one thousand six hundred
rupees per mensem or exercises, either by the nature of the duties attached to the office or by reason of
the powers vested in him, functions mainly of a managerial nature.

IRC 2 (L) "EMPLOYEE" means any person (other than an apprentice engaged under the Apprentices Act, 1961)
employed by an industrial establishment to do any skilled, semi-skilled or unskilled, manual, operational,
supervisory, managerial, administrative, technical or clerical work for hire or reward, whether the terms of
employment be express or implied, and also includes a person declared to be an employee by the appropriate
Government, but does not include any member of the Armed Forces of the Union;

IRC CHAPTER IV STANDING ORDERS - Applicability

28. (1) The provisions of this Chapter shall apply to every industrial establishment wherein three hundred or more
than three hundred workers, are employed, or were employed on any day of the preceding twelve months.
(2) Notwithstanding anything contained in sub-section (1), the provisions of this Chapter shall not apply to an
industrial establishment in so far as the workers employed therein are persons to whom the Fundamental and
Supplementary Rules, Civil Services (Classification, Control and Appeal) Rules, Civil Services (Temporary Service)
Rules, Revised Leave Rules, Civil Service Regulations, Civilians in Defence Service (Classification, Control and
Appeal) Rules or the Indian Railway Establishment Code or any other rules or regulations that may be notified in
this behalf by the appropriate Government, apply.
EMPLOYEES – Issue of Appointment Letter
KARNATAKA S & E ACT: ISSUE OF APPOINTMENT ORDERS.—Every employer, employing any person in or in
connection with his establishment, shall issue an appointment order in writing indicating the name, designation,
wage scale of such person and terms and conditions of his employment and serve the same on such person within
thirty days from the date of appointment in his establishment:

OSHW 6(1)(F)
Every employer shall,—
issue a letter of appointment to every employee on his appointment in the establishment, with such information
and in such form as may be prescribed by the appropriate Government and where an employee has not been
issued such appointment letter on or before the commencement of this Code, he shall, within three months of
such commencement, be issued such appointment letter;

OSH RULE 7 LETTER OF APPOINTMENT TO EMPLOYEE UNDER CLAUSE (F) OF SUB-SECTION (1) OF SECTION 6.-
No employee shall be employed in any establishment unless he has been issued a letter of appointment in the
prescribed format as appended to this Rule:
Provided that, an employee who has not been issued an appointment letter containing the required particulars ,
shall be issued an appointment letter within three months of coming into force of this rule.

Format
(i) Name of employee: (ix) Wages, Basic Pay & Dearness Allowance:
(ii) Father‘s name: (x) Other allowance including accommodation
(iii) Aadhar number: whichever is/are applicable:
(iv) Labour Identification Number (LIN) of the (xi) Avenue for achieving higher wages/higher
establishment: position
(v) Universal Account Number (UAN)/Insurance (xii) Applicability of social security EPFO and ESIC
Number (ESIC): benefits applicable
(vi) Designation: (xiii) Health check-up:
(vii) Category of skill: (xiv) Broad Nature of duties to be performed:
(viii) Date of joining: (xv) Any other information

It can be deduced thus that for both factories as well as establishments, appointment letter is mandatory.

TERMINATION
Either the Company or you may at any time terminate this agreement by giving in writing to the other party 1
months notice or in lieu thereof a sum equal to the amount of salary which would have been accrued to you
during the period of notice.
The Company shall have the right to terminate your employment without notice or payment in lieu thereof if:
(a) you commit any material breach of any of your duties and responsibilities under this contract,
(b) you are dismissed on grounds of misconduct which contravene the express or implied conditions of your
employment,
(c) you become insolvent or bankrupt, or are charged with any criminal offense which is prejudicial to the
interests of the Company,
(d) the Company is restricted from continuing to employ you by reason of any other legal incapability

Karnataka Shops and Establishments Act

Section 39. Notice of dismissal.— (1) No employer shall remove or dismiss an employee who has put in service
under him continuously for a period of not less than six months, except for a reasonable cause and unless and
until one month’s previous notice or pay in lieu thereof has been given ……..
(3) Where an employee has been removed or dismissed without reasonable cause or without proof of misconduct,
the employee shall, where the employer does not agree to reinstate him, be entitled to such compensation as the
appellate authority may determine, provided that such compensation shall not exceed an amount calculated at
one month’s pay for every year of service.
IESO Rules
13. Termination of employment.--(1) For terminating employment of a permanent workmen, notice in writing
shall be given either by the employer or the workmen - one month’s notice in the case of monthly-rated workmen
and two weeks’ notice in the case of other workmen: one month’s or two week’s pay, as the case may be, may be
paid in lieu of notice.
(2) No temporary workman whether monthly-rated, weekly-rated or piece-rated and no probationer or badli shall
be entitled to any notice or pay in lieu thereof if his services are terminated ,but the services of a temporary
workman shall not be terminated as a punishment unless he has been given an opportunity of explaining the
charges of misconduct alleged against him in the manner prescribed in Paragraph 14.
(3) Where the employment of any workmen is terminated, the wages earned by him and other dues, if any, shall
be paid before the expiry of the second working day from the day on which his employment is terminated.

IESO?? 19. Termination of employment

i. Services of a permanent employee may be terminated by either party giving to the other a notice in
writing or paying equivalent wages in lieu of the notice, as required under the rules of the Company.
ii. If any Departmental proceedings are pending against an employee, he cannot resign from service giving
notice, as required, in case the Management desires to continue the proceedings against him.
iii. No notice is necessary in the case of temporary or probationary or casual or Badli employee or in the case
of trainee and their services may be terminated forthwith subject to provisions of the Industrial Disputes
Act, 1947.
iv. In lieu of written notice, the company will pay wages for the respective periods shown and conversely, will
deduct the corresponding amounts from the employee’s earnings.
v. If an employee leaves before the expiry of the period of notice of termination by the Company, he will be
paid only for the period actually works. If an employee does not report for work after giving the notice of
his intention to resign, or reports for duty for a few days and stays away without serving full notice and an
amount equivalent to his basic salary for the requisite period of notice shall be recovered from him.
vi. If an employee gives notice of his intention to resign, the Management may accept the resignation and
release him at once or at any time before the date of expiry of the notice period, in which case he will be
paid only for the period he actually works.

RETRENCHMENT COMPENSATION
- 15 days average pay for completed year of continuous service or any part thereof in excess of six months.
- Last Drawn Salary
- Retrenchment compensation is to be calculated @ 15 days wages for every month comprising 30 days and
not assuming 26 days as applicable under the Payment of Gratuity Act
- ‘Continuous service’ means uninterrupted service for 240 days.
- However, sickness, authorized leave, legal strikes and lock-outs, and work stoppages not due to a
worker’s fault, do not interrupt one’s service
- Average pay depends on whether a workman is daily, weekly or monthly paid.

- Average Pay includes all remuneration capable of being expressed in terms of money like
 Basic Wages  Value of Medical Attendance
 Dearness Allowance  Any commission payable on promotion of
 Value of Free Food or Food Allowance Sales or business or both.
 Over-Time  Does not Include, Bonus, PF, Pension or
 Value of House Accommodation Gratuity

IRC 2(zh) "retrenchment" means the termination by the employer of the service of a worker for any reason
whatsoever, otherwise than as a punishment inflicted by way of disciplinary action, but does not include—
(i) voluntary retirement of the worker; or
(ii) retirement of the worker on reaching the age of superannuation; or
(iii) termination of the service of the worker as a result of the non-renewal of the contract of employment
between the employer and the worker concerned on its expiry or of such contract being terminated under a
stipulation in that behalf contained therein; or
(iv) termination of service of the worker as a result of completion of tenure of fixed term employment; or
(v) termination of the service of a worker on the ground of continued ill-health;

IDA 2(oo) "RETRENCHMENT means the termination by the employer of the service of a workman for any reason
whatsoever, otherwise than as a punishment inflicted by way of disciplinary action, but does not include--
(a) voluntary retirement of the workman; or
(b) retirement of the workman on reaching the age of superannuation if the contract of employment between the
employer and the workman concerned contains a stipulation in that behalf; or
(bb) termination of the service of the workman as a result of the non-renewal of the contract of employment
between the employer and the workman concerned on its expiry or of such contract being terminated under a
stipulation in that behalf contained therein; or
(c) termination of the service of a workman on the ground of continued ill-health

Wherein the court held that an analysis of the definition reveals four essential ingredients, namely;
1) There must be a termination of the service of a workman.
2) The termination must be by the employer,
3) For any reason whatsoever, and
4) Otherwise than as by way of punishment inflicted by way of disciplinary action.

“Reduction of surplus labour with a view to cut down expenses and to effect economy of operations”
It can be referred to as
- Technological unemployment
- Transitional unemployment
The common feature has been the involuntary unemployment of surplus labour.

IRC Sec 70 Conditions precedent to retrenchment of workers. (IDA 25F – workman)

No worker employed in any industry who has been in continuous service for not less than one year under an
employer shall be retrenched by that employer until—
(a) the worker has been given one month's notice in writing indicating the reasons for retrenchment and the
period of notice has expired, or the worker has been paid in lieu of such notice, wages for the period of the notice;
(b) the worker has been paid, at the time of retrenchment, compensation which shall be equivalent to fifteen days'
average pay, or average pay of such days as may be notified by the appropriate Government, for every completed
year of continuous service or any part thereof in excess of six months; and
(c) notice in such manner as may be prescribed is served on the appropriate Government or such authority as may
be specified by the appropriate Government by notification.

- Even where there is refusal to accept the retrenchment compensation and wages in lieu of notice, it will
not invalidate the tender of payment.
- The mere fact that a notice has not been given to the appropriate government will not vitiate the entire
process of retrenchment but will be defective to that extent and attract IDA Sec.31 (2) which is Rs. 100/-
- Notice of Retrenchment Under Clause (C) of Section 25F; Rule 76 – Notice of Retrenchment; FORM P
 - The Burden of proof is on the workmen to show that he has worked for a continuous period of 240 days.
- Retrenchment of an employee without following the provisions of section 25F would be void-ab-inition.
- Here the workmen can claim re-instatement

IRC Sec 71. Procedure for retrenchment: (IDA 25G – workman): Where any worker in an industrial establishment
who is a citizen of India, is to be retrenched and he belongs to a particular category of workers in that
establishment, then, in the absence of any agreement between the employer and the worker in this behalf, the
employer shall ordinarily retrench the worker who was the last person to be employed in that category , unless for
reasons to be recorded the employer retrenches any other worker. (LIFO)

• Rule of Last In First Out = LIFO

• Where there is a departure from this rule, the reasons should be noted.
• Cannot pick and choose offer should be to all
• Last come first go – not an absolute rule, reasons should be provided
• Retrenchment justified when dept. is shut down.

IRC Sec 72. Reemployment of retrenched worker: (IDA 25H – workman): Where any worker is retrenched and the
employer proposes to take into his employment any person within one year of such retrenchment, he shall, in such
manner as may be prescribed, give an opportunity to the retrenched workers who are citizens of India to offer
themselves for re-employment and such retrenched workers who offer themselves for re-employment shall have
preference over other persons.

IDA Rule 78 - provided

• In case of limited vacancies only seniors need to be intimated
• Where appointment for less than 1 month – need not follow the rule
• If they do not present for re-employment, need not call them again.

IRC SEC 2(O) "FIXED TERM EMPLOYMENT" means the engagement of a worker on the basis of a written contract
of employment for a fixed period:
Provided that—
(a) his hours of work, wages, allowances and other benefits shall not be less than that of a permanent
worker doing the same work or work of similar nature;
(b) he shall be eligible for all statutory benefits available to a permanent worker proportionately according to
the period of service rendered by him even if his period of employment does not extend to the qualifying
period of employment required in the statute; and
(c) he shall be eligible for gratuity if he renders service under the contract for a period of one year;

Difference between CL and contract employee

- According to the old law, if FTC was created for a job of permanent nature, and the appointment was
continuous (ie year after year), then in such a case the appointment/contract would become a Unfair
labour practice(ULP). In such a case the termination would be retrenchment.
- ULP – Schedule V – Entry 10 (OLD ID ACT)
- Retrenchment protection from hire and fire.

FIXED TERM CONTRACT

• Exception to retrenchment
• Non Renewal of the Fixed Term Contract will not be tantamount to retrenchment.
• If the workman is allowed to continue in service by making periodic appointments from time to time, it would
not fall under the exception

Fixed Term Contract – Interpretation according to the old ID Act

- There is no magic in the use of words of naming any employment as 'fixed term employment' merely for the purpose
of keeping it out of the purview of definition of 'retrenchment' whereas, in fact, the post exists, work exist and
requirement to continue the incumbent on the post exists but still the orders are pretended to be issued for fixed
term employment from time to time. In such cases, it is appropriate to lift the veil to look to the real intent and soul
of the order.

ABANDONMENT
 - Termination of workman retrenched without giving any reason.
- Fixed term contract but where the same has been extended indefinitely
- Abandonment can amount to retrenchment but voluntary resignation not.
- Employed in Projects/not included
- Termination of the services of a workman because he has abandoned the job will amount to
retrenchment; But in case he gives his resignation voluntarily, it will not be retrenchment.

Continued ill-health
- Intermittent ill health cannot be termed as Continued ill-health.
- If on account of a workman’s disease or incapacity or debility in the functioning, the resultant product or
service is likely to be affected in anyway, or to become a risk to the health, life or property of the
consumer it should be called continued Ill health (Bus Drivers Vision case)
- Ill-health should be clearly proved with sufficient evidence. Eg: Diabetes unless affecting the service would
not amount to continues ill health.

Requirement of existing running factory

- The entire scheme of the law dealing with retrenchment assumes that there is an existing and running
industry.
- Retrenchment cannot be applied in cases where there is complete closure of the establishment and
where the services of all the workmen has been terminated.

Probationer - 3 types
- Maximum period of probation mentioned in service rules or letter of appointment- after expiry of the
period - if employed - deemed employee - retrenchment
- Maximum period of probation not mentioned in service rules or letter of appointment- No retrenchment
comp.
- Maximum period of probation mentioned in service rules or letter of appointment- but a confirmation to
be provided for appointment then not deemed employee - No retrenchment comp

CHAPTER X: SPECIAL PROVISIONS RELATING TO LAY-OFF, RETRENCHMENT AND CLOSURE IN CERTAIN

ESTABLISHMENTS (IDA Chapter VB)
77. (1) The provisions of this Chapter shall apply to an industrial establishment (not being an establishment of a
seasonal character or in which work is performed only intermittently) in which not less than three hundred
workers, or such higher number of workers as may be notified by the appropriate Government, were employed on
an average per working day in the preceding twelve months.
……
(3) For the purposes of this Chapter,"industrial establishment" means—
(i) a factory as defined in clause (m) of section 2 of the Factories Act, 1948;
(ii) a mine as defined in clause (j) of sub-section (1) of section 2 of the Mines Act, 1952; or
(iii) a plantation as defined in clause (f) of section 2 of the Plantations Labour Act, 1951.

CHAPTER VB of THE OLD ACT

- Was inserted by amendment in 1976.
- The chapter has been inserted for industrial harmony.
- But the intention was to cover larger organisations.

IRC Sec 79 Conditions precedent to retrenchment of workers to which Chapter X applies. (IDA 25N)
1) No worker employed in any industrial establishment to which this Chapter applies, who has been in continuous
service for not less than one year under an employer shall be retrenched by that employer until,—
(a) the worker has been given three month's notice in writing indicating the reasons for retrenchment and the
period of notice has expired, or the worker has been paid in lieu of such notice, wages for the period of the notice;
and
(b) the prior permission of the appropriate Government has been obtained on an application made in this behalf.
(2) An application for permission under sub-section (1) shall be made by the employer electronically or otherwise
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 workers concerned in such manner as may be prescribed.
(3) Where an application for permission under sub-section (1) has been made, the appropriate Government, after
making such enquiry as it thinks fit and after giving a reasonable opportunity of being heard to the employer, the
workers concerned and the persons interested in such retrenchment, may, having r egard to the genuineness and
adequacy of the reasons stated by the employer, the interests of the workers 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 and the workers.
(4) Where an application for permission has been made under sub-section (1) and the appropriate Government
does not communicate the order granting or refusing to grant permission to the employer within a period of sixty
days from the date on which such application is made, the permission applied for shall be deemed to have been
granted on the expiration of the said period of sixty days and the application shall be deemed to have been
disposed of accordingly by the appropriate Government.
(5) An order of the appropriate Government granting or refusing 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 may, either on its own motion or on the application made by the employer or any
worker, review its order granting or refusing to grant permission under sub-section (3) within the prescribed time
from the date on which such order is made or refer the matter or, as the case may be, cause it to be referred to a
Tribunal for adjudication:
Provided that where a reference has been made to a Tribunal under this sub-section, it shall pass an award within
a period of thirty days from the date of such reference.
(7) Where no application for permission under sub-section (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 worker and the worker shall be entitled to all the benefits under any law
for the time being in force as if no notice had been given to him.
(8) Notwithstanding anything contained in the foregoing provisions of this section, the appropriate Government
may, if it is satisfied that owing to such exceptional circumstances as accident in the establishment or death of the
employer or the like, it is necessary so to do, by order, direct that the provisions of sub-section (1) shall not apply
in relation to such establishment for such period as may be specified in the order.
(9) Where permission for retrenchment has been granted under sub-section (3) or where permission for
retrenchment is deemed to be granted under sub-section (4), every worker who is employed in that establishment
immediately before the date of application for permission under this section shall be entitled to receive, at the
time of retrenchment, compensation which shall be equivalent to fifteen days average pay, or average pay of such
days as may be notified by the appropriate Government, for every completed year of continuous service or any
part thereof, in excess of six months.

FORM IX-IRC
Section of the 25 N Old ID Act
- Notice for Permission for Retrenchment under Section 25N (1)(b)
- Rule 76A(1) – Notice of and Application for Retrenchment.
- Form PA
- Rule 77 – Maintenance of Seniority List The employer shall prepare a list of all workmen in the particular category from
which retrenchment is contemplated arranged according to the seniority of their service in that category and cause a copy thereof to
be pasted on a notice board in a conspicuous place in the premises of the industrial establishment at least seven days before the
actual date of retrenchment.
- Rule 78 – Re-employment of Retrenched Workmen

- Notice should be personally provided by registered post.

- Any mode of payment can be resorted to including asking to collect dues from office
- Retrenchment will be illegal when no seniority list has been prepared
- By way of abundant caution be so arranged that there should be sufficient time for remittance of
retrenchment compensation, that if the concerned employee does not accept the remittance of the
compensation or notice of both, in that event the employer has to send a notice by registered post or bank
draft of the money ; If not the retrenchment will be illegal.

Procedure for Retrenchment Under Sec.79

1 Identify the workmen proposed to be retrenched in the respective category / divisions.
2 Preparation of seniority list of employees category-wise
3 Fill up the application form and submit to the Appropriate Government for approval to retrench
 4 Appropriate Government will call objections
5 Employer should wait till the permission is given or after 60 days it is deemed to be granted.
6 Notice may be served to the workman after taking the decision to retrench them, at any time, before or
after obtaining the permission. OR retrench on obtaining the permission by giving 3 months wages in lieu
of the notice.
7 To pay compensation to the workmen proposed to be retrenched "at the time of retrenchment".

Encashment of cheque by a workman-containing amount of retrenchment compensation will not be a waiver to

challenge the validity of retrenchment.

IRC Sec 81 Duty of an employer to maintain muster rolls of workers: Notwithstanding that workers in any
industrial establishment have been laid-off, it shall be the duty of every employer to maintain for the purposes of
this Chapter X, a muster roll, and to provide for the making of entries therein by workers who may present
themselves for work at the establishment at the appointed time during normal working hours.

MBA Sec 12 Dismissal during absence of pregnancy.—

(1) When a woman absents herself from work in accordance with the provisions of this Act , it shall be unlawful for
her employer to discharge or dismiss her during or on account of such absence or to give notice of discharge or
dismissal on such a day that the notice will expire during such absence, or to vary to her disadvantage any of the
conditions of her service.
(2) (a) The discharge or dismissal of a woman at any time during her pregnancy, if the woman but for such
discharge or dismissal would have been entitled to maternity benefit or medical bonus referred to in section 8,
shall not have the effect of depriving her of the maternity benefit or medical bonus: Provided that where the
dismissal is for any prescribed gross misconduct, the employer may, by order in writing communicated to the
woman, deprive her of the maternity benefit or medical bonus or both.
(b) Any woman deprived of maternity benefit or medical bonus, or both, or discharged or dismissed during or
on account of her absence from work in accordance with the provisions of this Act, may, within sixty days from
the date on which order of such deprivation or discharge or dismissal is communicated to her, appeal to such
authority as may be prescribed, and the decision of that authority on such appeal, whether the woman should
or should not be deprived of maternity benefit or medical bonus, or both, or discharged or dismissed shall be
final.]
(c) Nothing contained in this sub-section shall affect the provisions contained in sub-section (1).

IRC SEC 2 (P) "INDUSTRY" means any systematic activity carried on by co-operation between an employer and
worker (whether such worker is employed by such employer directly or by or through any agency, including a
contractor) for the production, supply or distribution of goods or services with a view to satisfy human wants or
wishes (not being wants or wishes which are merely spiritual or religious in nature), whether or not,—
(i) any capital has been invested for the purpose of carrying on such activity; or
(ii) such activity is carried on with a motive to make any gain or profit, but does not include—
(i) institutions owned or managed by organisations wholly or substantially engaged in any charitable,
social or philanthropic service; or
(ii) any activity of the appropriate Government relatable to the sovereign functions of the appropriate
Government including all the activities carried on by the departments of the Central Government
dealing with defence research, atomic energy and space; or
(iii) any domestic service; or
(iv) any other activity as may be notified by the Central Government;

IDA SEC 2(J) "INDUSTRY" means any systematic activity carried on by co-operation between an employer and his
workmen (whether such workmen are employed by such employer directly or by or through any agency, including
a contractor) for the production, supply or distribution of goods or services with a view to satisfy human wants or
wishes (not being wants or wishes which are merely spiritual or religious in nature), whether or not,--
(i) any capital has been invested for the purpose of carrying on such activity; or
(ii) such activity is carried on with a motive to make any gain or profit, and includes--
(a) any activity of the Dock Labour Board established under section 5A of the Dock Workers
(Regulation of Employment) Act, 1948 (9 of 1948);
(b) any activity relating to the promotion of sales or business or both carried on by an establishment.
but does not include--
 (1) any agricultural operation except where such agricultural operation is carried on in an
integrated manner with any other activity (being any such activity as is referred to in the
foregoing provisions of this clause) and such other activity is the predominant one.
Explanation.--For the purposes of this sub-clause, "agricultural operation" does not include any
activity carried on in a plantation as defined in clause (f) of section 2 of the Plantations Labour
Act, 1951 (69 of 1951); or
(2) hospitals or dispensaries; or
(3) educational, scientific, research or training institutions; or
(4) institutions owned or managed by organisations wholly or substantially engaged in any
charitable, social or philanthropic service; or
(5) khadi or village industries; or
(6) any activity of the Government relatable to the sovereign functions of the Government
including all the activities carried on by the departments of the Central Government dealing with
defence research, atomic energy and space; or
(7) any domestic service; or
(8) any activity, being a profession practised by an individual or body or individuals, if the number
of persons employed by the individual or body of individuals in relation to such profession is less
than ten; or
(9) any activity, being an activity carried on by a co-operative society or a club or any other like
body of individuals, if the number of persons employed by the co-operative society, club or other
like body of individuals in relation to such activity is less than ten;

IRC Sec 40. NOTICE OF CHANGE

No employer, who proposes to effect any change in the conditions of service applicable to any worker in respect of
any matter specified in the Third Schedule, shall effect such change,—
(i) without giving to the workers likely to be affected by such change a notice in such manner as may be
prescribed of the nature of the change proposed to be effected; or
(ii) within twenty-one days of giving such notice:
Provided that no notice shall be required for effecting any such change—
(a) where the change is effected in pursuance of any settlement or award;
(b) where the workers likely to be affected by the change are persons to whom the Fundamental and
Supplementary Rules, Civil Services (Classification, Control and Appeal) Rules, Civil Services (Temporary
Service) Rules, Revised Leave Rules, Civil Services Regulations, Civilians in Defence Services (Classification,
Control and Appeal) Rules or the Indian Railway Establishment Code or any other rules or regulations that
may be notified in this behalf by the appropriate Government in the Official Gazette, apply;
(c) in case of emergent situation which requires change of shift or shift working, otherwise than in
accordance with standing orders, in consultation with Grievance Redressal Committee;
(d) if such change is effected in accordance with the orders of the appropriate Government or in
pursuance of any settlement or award

THE THIRD SCHEDULE [See sections 40 and 101 (1)] (IDA FOURTH SCHEDULE)
CONDITIONS OF SERVICE FOR CHANGE OF WHICH NOTICE IS TO BE GIVEN
1. Wages, including the period and mode of payment.
2. Contribution paid, or payable, by the employer to any provident fund or pension fund or for the benefit of the
workers under any law for the time being in force.
3. Compensatory and other allowances.
4. Hours of work and rest intervals.
5. Leave with wages and holidays.
6. Starting, alteration or discontinuance of shift working otherwise than in accordance with standing orders.
7. Classification by grades.
8. Withdrawal of any customary concession or privilege or change in usage.
9. Introduction of new rules of discipline, or alteration of existing rules, except in so far as they are provided in
standing orders.
10. Rationalisation, standardisation or improvement of plant or technique which is likely to lead to retrenchment
of workers.
11. Any increase or reduction (other than casual) in the number of persons employed or to be employed in any
occupation or process or department or shift, not occasioned by circumstances over which the employer has no
control.

IRC RULE 16. THE MANNER OF GIVING OF NOTICE FOR CHANGE PROPOSED TO BE EFFECTED UNDER CLAUSE (I)
OF SECTION 40.-
(1) Any employer intending to effect any change in the conditions of service applicable to any worker in respect of
any matter specified in the Third Schedule to the Code, shall give notice in Form-II to such worker affected by such
change.
(2) The notice referred in sub-rule (1) shall be displayed conspicuously by the employer on the notice board at the
main entrance of the industrial establishment and the office of the concerned Manager of the industrial
establishment:
Provided that where there is a registered Trade Union or registered Trade Unions relating to the industrial
establishment a copy of such notice shall also be served on the Secretary of such Trade Union or each of the
Secretaries of such Unions, as the case may be.

WHEN DOES SEC. 40 NOT APPLY

 Where the change is effected in pursuance of any settlement or award
 A change which is in accordance with standing orders
 Circumstances over which the employer has no control.

IDA SEC 9A. NOTICE OF CHANGE.

No employer, who proposes to effect any change in the conditions of service applicable to any workman in respect
of any matter specified in the Fourth Schedule, shall effect such change,--
(a) without giving to the workmen likely to be affected by such change a notice in the prescribed manner of
the nature of the change proposed to be effected; or
(b) within twenty-one days of giving such notice:
Provided that no notice shall be required for effecting any such change--
(a) where the change is effected in pursuance of any settlement or award; or
(b) where the workmen likely to be affected by the change are persons to whom the Fundamental and
Supplementary Rules, Civil Services (Classification, Control and Appeal) Rules, Civil Services (Temporary
Service) Rules, Revised Leave Rules, Civil Service Regulations, Civilians in Defence Services (Classification,
Control and Appeal) Rules or the Indian Railway Establishment Code or any other rules or regulations that
may be notified in this behalf by the appropriate Government in the Official Gazette, apply.

If not a workman - if there is a clause of alteration only if it is unconscionable it would be voidable. It would not be
sustainable if there is no clause of unilateral alteration in the contract
DEEMED AGAINST 9A:
• Sudden withdrawal of overtime benefits without notice,
• change in overtime allowance rates,
• withdrawal or reduction in project allowance,
• change in commencement of working hours, increasing hours of work,
• change in weekly holiday,
• withdrawal or reduction of medical benefits,
• reducing retirement age of workers,
• discontinuance of bus facility,
• retrenchment of workers due to installation of new machinery, without notice etc have all been seen by the
Hon’ble High Courts and Hon’ble Supreme Court to be violative of Section 9A of the Act.

• Matters to which this section applies is given in the Fourth Schedule (IDA)
• A notice should be sent individually to the workmen
ₓ Not to union or display on the notice board.
• One of the pre-conditions is that the change should adversely affect the workman.
• When rationalization results in retrenchment it is mandatory to serve notice. Thus notice of change
should precede the introduction of rationalization resulting in rationalization.

CONDITIONS OF SERVICE, ETC., TO REMAIN UNCHANGED UNDER CERTAIN CIRCUMSTANCES DURING PENDENCY
OF PROCEEDINGS.
SEC 90. (1) Where an industrial dispute pertaining to an establishment or undertaking is already pending before a
conciliation officer or an Arbitrator or a Tribunal or a National Industrial Tribunal, as the case may be, with regard
to matters not covered by the notice of change issued by an employer under section 40, no employer shall—
(a) in regard to any matter connected with such dispute, alter to the prejudice of the workers concerned
in such dispute the conditions of service applicable to them immediately before the commencement of
such proceedings; or
(b) for any misconduct connected with the dispute, discharge or punish, whether by dismissal or
otherwise any worker concerned in such dispute, save with the express permission in writing of the
authority before which the proceeding is pending.

(2) During the pendency of any such proceeding in respect of an industrial dispute referred in sub-section (1), the
employer may, in accordance with standing orders applicable to a worker concerned in such dispute or, where
there are no such standing orders, in accordance with the terms of the contract, whether express or implied,
between him and the worker—
(a) alter, in regard to any matter not connected with the dispute, the conditions of service applicable to
that worker immediately before the commencement of such proceeding; or
(b) for any misconduct not connected with the dispute, discharge or punish, whether by dismissal or
otherwise, that worker:
Provided that no such worker shall be discharged or dismissed, unless he has been paid wages for one month and
an application has been made by the employer to the authority before which the proceeding is pending for
approval of the action taken by the employer.

(3) Notwithstanding anything contained in sub-section (2), no employer shall, during the pendency of any
proceeding in respect of an industrial dispute, take any action against any protected worker concerned in such
dispute—
(a) by altering, to the prejudice of such protected worker, the conditions of service applicable to him
immediately before the commencement of such proceeding; or
(b) by discharging or punishing, whether by dismissal or otherwise, such protected worker, save with the
express permission in writing of the authority before which the proceeding is pending.
Explanation.—For the purposes of this sub-section, a "protected worker" in relation to an establishment,
means a worker who, being a member of the executive or other office-bearer of a registered Trade Union
connected with the establishment, is recognized as such in accordance with rules made in this behalf.

(4) In every establishment, the number of workers to be recognised as protected workers for the purposes of sub-
section (3) shall be one per cent. of the total number of workers employed therein subject to a minimum number
of five protected workers and a maximum number of one hundred protected workers and for the aforesaid
purpose, the appropriate Government may make rules providing for the distribution of such protected workers
among various Trade Unions, if any, connected with the establishment and the manner in which the workers may
be chosen and recognised as protected workers.

(5) Where an employer makes an application to conciliation officer, arbitrator, Tribunal or National Industrial
Tribunal, as the case may be, under the proviso to sub-section (2) for approval of the action taken by him, the
authority concerned shall, without delay, hear such application and pass, within a period of three months from
the date of receipt of such application, such order in relation thereto as it deems fit:
Provided that where any such authority considers it necessary or expedient so to do, it may, for reasons to be
recorded in writing, extend such period by such further periods as it may think fit:
Provided further that no proceedings before any such authority shall lapse merely on the ground that any period
specified in this sub-section had expired without such proceedings being completed.

- The main intention behind the section is maintaining status quo during pendency of a dispute
- A workman can be suspended pending permission for dismissal as there is no termination in this case.
- The ban on the dismissal of the workman has been inserted as a safe guard against victimization.
- For the ban to be operative the workmen should be persons concerned in the dispute.
- There were two conflicting views;
o The union leaders who raised and lead ID
o Everyone who is going to be affected by the award which would passed
- It is the workmen who has to prove that he is a concerned person in the dispute
- Here the workman can be discharged or dismissed for act of misconduct not connected with the dispute provided
the approval of the authority is taken; The order of dismissal will be incomplete without approval. Where the
Tribunal does provide the approval the same will go back to the date from which it had come into force.

IESO SCHEDULE 1 (2). CLASSIFICATION OF WORKMEN.—

(a) Workmen shall be classified as --
(1) permanent,
(2) Probationers,
(3) badlis,
(4) temporary,
(5) casual,
(6) apprentices.
(b) A “permanent workman” is a workman who has been engaged on a permanent basis and includes any person
who has satisfactorily completed a probationary period of three months in the same or another occupation in the
industrial establishment, including breaks due to sickness, accident, leave, lock-out, strike (not being an illegal
strike) or involuntary closure of the establishment.
(c) A “probationer” is a workman who is provisionally employed to fill a permanent vacancy in a post and has not
completed three months’ service therein. If a permanent employee is employed as a probationer in a new post he
may, at any time during the probationary period of three months, be reverted to his old permanent post.
(d) A “badli” is a workman who is appointed in the post of a permanent workman or probationer who is
temporarily absent.
(e) A “temporary workman” is a workman who has been engaged for work which is of an essentially temporary
nature likely to be finished within a limited period.
(f) A “casual workman” is a workman whose employment is of a casual nature.
(g) An “apprentice” is a learner who is paid an allowance during the period of his training.

IESO SCHEDULE 1 (13)(3) THE FOLLOWING ACTS AND OMISSIONS SHALL BE TREATED AS MISCONDUCT.
(a) wilful insubordination or disobedience, whether alone or in combination with others, to any lawful and
reasonable order of a superior,
(b) theft, fraud or dishonesty in connection with the employer’s business or property,
(c) willful damage to or loss of employer’s goods or property,
(d) taking or giving bribes or any illegal gratification,
(e) habitual absence without leave or absence without leave for more than 10 days,
(f) habitual late attendance,
(g) habitual breach of any law applicable to the establishment,
(h) riotous or disorderly behaviors during working hours at the establishment or any act subversive of discipline,
(i) habitual negligence or neglect of work,
(j) frequent repetition of any act or omission for which a fine may be imposed to a maximum of 2 per cent of the
wages in a month.
(k) striking work or inciting others to strike work in contravention of the provision of any law, or rule having the
force of law.

MISCONDUCT
1. Relating to duty
(a) Express duty
o Statutes
o Contract – b/w
 parties
 Collective agreement
(b) Implied duty
o Common law
ₓ Non-performance of duty
ₓ Engaging in work similar to the employer
ₓ Absence without leave
ₓ Late attendance
ₓ Strikes
ₓ Go-slow
ₓ Gherao

2. Relating to discipline
3. Relating to morality

Minor Misconduct
1. Late Coming
2. Absence From Duty Without Leaves For A Period Of Less Than Six Days
3. Loitering, Gossiping In Department During Working Hours
4. Failure To wear Tight Clothes/Specified Uniform.
5. Negligence Of Duties Or Neglect Of Work.

PENALTIES FOR MINOR MISCONDUCT

• Warning, • Recovery Of Loss Of Goods For Which The
• Fine, Concerned Workman Is Accountable, Recovery
• Passing Adverse Entry In Service Records, From Wages Of The Whole Or Part Of Any Loss
Caused By The Workman Through Negligence.
Major Misconduct
1. willful insubordination or disobedience of any lawful and reasonable order of a superior.
2. going on illegal strike or abetting, inciting, instigation.
3. willful slowing down in performance of work or instigation there of.
4. Theft, Fraud Or Dishonesty In Connection With The Employer’s Business Or Property.
5. Taking Or Giving Bribes Or Any Illegal Gratification.
6. Habitual Absenteeism without Leave for More Than 10 Consecutive Days Or Over Staying The Sanctioned Leave
Without Sufficient Grounds.
7. Habitual Breach Of Any Standing Order Or Any Law Applicable To Establishment.

PENALTIES FOR MAJOR MISCONDUCTS

The following penalties may be imposed for good and sufficient reasons if an employee found guilty of major
misconduct.
• Warning Or Censure, • Discharge, Dismissal, Vacation Of Company
• Withholding Of Increment, Quarter Or
• Fine, • Any Other Punishment Which The Manager
• Stopping Promotion, Demotion, May Deem Fit
• Suspension,

IRC SEC 38: TIME-LIMIT FOR COMPLETING DISCIPLINARY PROCEEDINGS AND LIABILITY TO PAY SUBSISTENCE
ALLOWANCE.
(1) Where any worker is suspended by the employer pending investigation or inquiry into complaints or charges of
misconduct against him, such investigation or inquiry, or where there is an investigation followed by an inquiry,
both the investigation and inquiry shall be completed ordinarily within a period of ninety days from the date of
suspension.
(2) The standing orders certified under sub-section (8) of section 30 or modified under section 35 shall provide that
where a worker is suspended as referred to in sub-section (1), the employer in relation to an industrial
establishment or undertaking shall pay to such worker employed in such industrial establishment or undertaking
subsistence allowance at the rates specified in sub-section (3) for the period during which such worker is placed
under suspension pending investigation or inquiry into complaints or charges of misconduct against such worker.
(3) The amount of subsistence allowance payable under sub-section (2) shall be—
(a) at the rate of fifty per cent. of the wages which the worker was entitled to immediately preceding the date of such
suspension, for the first ninety days of suspension; and
(b) at the rate of seventy-five per cent. of such wages for the remaining period of suspension, if the delay in the
completion of disciplinary proceedings against such worker is not directly attributable to the conduct of such worker.

THE SECOND SCHEDULE [See sections 2 (zo), 84, 86 (5) and 101(1)] : UNFAIR LABOUR PRACTICES
I. ON THE PART OF EMPLOYERS AND TRADE UNIONS OF EMPLOYERS
(1) To interfere with, restrain from, or coerce, workers in the exercise of their right to organise, form, join or assist
a Trade Union or to engage in concerted activities for the purposes of collective bargaining or other mutual aid or
protection, that is to say,—
(a) threatening workers with discharge or dismissal, if they join a Trade Union;
(b) threatening a lock-out or closure, if a Trade Union is organised;
(c) granting wage increase to workers at crucial periods of Trade Union organisation, with a view to undermining the
efforts of the Trade Union organisation.
(2) To dominate, interfere with or contribute support, financial or otherwise, to any Trade Union, that is to say,—
(a) an employer taking an active interest in organising a Trade Union of his workers; and
(b) an employer showing partiality or granting favour to one of several Trade Unions attempting to organise his workers
or to its members, where such a Trade Union is not a recognised Trade Union.
(3) To establish employer sponsored Trade Unions of workers.
(4) To encourage or discourage membership in any Trade Union by discriminating against any worker, that is to
say,—
(a) Discharging or punishing a worker, because he urged other workers to join or organise a Trade Union;
(b) Discharging or dismissing a worker for taking part in any strike (not being a strike which is deemed to be an illegal strike
under this Code);
(c) Changing seniority rating of workers because of Trade Union activities;
(d) Refusing to promote workers to higher posts on account of their Trade Union activities;
(e) Giving unmerited promotions to certain workers with a view to creating discord amongst other workers, or to
undermine the strength of their Trade Union;
(f) Discharging office-bearers or active members of the Trade Union on account of their Trade Union activities.
(5) To discharge or dismiss workers,—
(a) by way of victimisation;
 (b) not in good faith, but in the colourable exercise of the employer's rights;
(c) by falsely implicating a worker in a criminal case on false evidence or on concocted evidence;
(d) for patently false reasons;
(e) on untrue or trumped up allegations of absence without leave;
(f) in utter disregard of the principles of natural justice in the conduct of domestic enquiry or with undue haste;
(g) for misconduct of a minor or technical character, without having any regard to the nature of the particular misconduct
or the past record or service of the worker, thereby leading to a disproportionate punishment.
(6) To abolish the work of a regular nature being done by workers, and to give such work to contractors as a
measure of breaking a strike.
(7) To transfer a worker mala fide from one place to another, under the guise of following management policy.
(8) To insist upon individual workers, who are on a legal strike to sign a good conduct bond, as a precondition to
allowing them to resume work.
(9) To show favouritism or partiality to one set of workers regardless of merit.
(10) To employ workers as badli workers, casuals or temporaries and to continue them as such for years, with the
object of depriving them of the status and privileges of permanent workers.
(11) To discharge or discriminate against any worker for filing charges or testifying against an employer in any
enquiry or proceeding relating to any industrial dispute.
(12) To recruit worker during a strike which is not an illegal strike.
(13) Failure to implement award, settlement or agreement.
(14) To indulge in acts of force or violence.
(15) To refuse to bargain collectively, in good faith with the recognised Trade Unions.
(16) Proposing or continuing a lock-out deemed to be illegal under this Code.

II. ON THE PART OF WORKERS AND TRADE UNIONS OF WORKERS

(1) To advise or actively support or instigate any strike deemed to be illegal under this Code.
(2) To coerce workers in the exercise of their right to self-organisation or to join a Trade Union or refrain from,
joining any Trade Union, that is to say—
(a) for a Trade Union or its members to picketing in such a manner that non-striking workers are physically debarred
from entering the work places;
(b) to indulge in acts of force or violence or to hold out threats of intimidation in connection with a strike against non-
striking workers or against managerial staff.
(3) For a recognised union to refuse to bargain collectively in good faith with the employer.
(4) To indulge in coercive activities against certification of a bargaining representative.
(5) To stage, encourage or instigate such forms of coercive actions as wilful, "go-slow", squatting on the work
premises after working hours or "gherao" of any of the members of the managerial or other staff.
Explanation 1.—For the removal of doubts, it is clarified that "go-slow" shall mean an occasion when more than one
worker in an establishment conjointly work more slowly and with less effort than usual to try to persuade the employer
of the establishment to agree to higher pay or better service condition or such other demand.
Explanation 2.—For the purposes of Explanation 1, the expression "usual" shall mean,—
(i) where the standard has been specified for a worker for his work either daily, weekly or monthly basis, such work; and
(ii) where no such standard has been specified such rate of work which is the average of work in the previous three
months calculated on daily or weekly or monthly basis, as the case may be.
(6) To stage demonstrations at the residence of the employers or the managerial staff members.
(7) To incite or indulge in wilful damage to employer's property connected with the industry.
(8) To indulge in acts of force or violence or to hold out threats of intimidation against any worker with a view to
prevent him from attending work.

IRC RULE 41 MANNER OF HOLDING AN ENQUIRY UNDER SUB-SECTION (1) OF SECTION 85.-
Complaint .— (1) On receipt of a complaint of the offence committed under sub-sections (3), (5), (7), (8), (9), (10),
(11) and (20) of section 86 and sub-section (7) of section 89, the same shall be enquired by an officer not below the
rank of Under Secretary to the Government of India under sub-section (1) of section 85 (hereinafter referred to as
the enquiry officer).
(2) Issue of Notice .— If the complaint filed is admitted by the Enquiry officer, he shall call upon the person or
persons through a notice to be sent electronically and a copy of the same to be posted on Samadhan Portal to
appear before him on a specified date together with all relevant documents and witnesses, if any, and shall inform
the complainant of the date so specified.
(3) If the person or his representative fails to appear on the specified date, the Enquiry Officer may proceed to hear
and determine the complaint ex-parte.
(4) If the complainant fails to appear on the specified date without any intimation to the Enquiry officer on two
consecutive dates, the complaint may be dismissed .
Provided that not more than three adjournments may be given on the joint application made by complainant and
the opposite party.
Provided further that the enquiry officers shall at his discretion permit hearing the parties or any of the party, as
the case may be, through video conferencing.
(5) Authorisation.—The authorisation to appear on behalf of any person, under section sub-section (2) of section
85 shall be given by a certificate or electronic certificate, as the case may be, which shall be presented to the
Enquiry Officer during the hearing of the complaint and shall form part of the record.
(6) Permission to appear.—Any person who intends to appear in the proceeding on behalf of complainant shall
present before the Enquiry Officer and submit a brief written statement explaining the reason for his appearance.
The Enquiry officer shall record an order on the statement and in the case of refusal shall include reasons for the
same, and incorporate it in the record.
(7) Presentation of documents.— Complaint or other documents relevant to the complaint may be presented in
person to the Enquiry Officer at any time during hours fixed by the Enquiry Officer, or may be sent to him
electronically or by registered post or speed post.
(8) The Enquiry Officer shall endorse, or cause to be endorsed, on each document the date of the presentation or
receipt, as the case may be. If the documents have been submitted electronically, no such endorsement shall be
necessary.
(9) Refusal to entertain complaint .—
(i) The Enquiry Officer may refuse to entertain a complaint presented under sub-section (1) of section 85 if
after giving the complainant an opportunity of being heard, the Enquiry Officer is satisfied, for reasons to be
recorded in writing that—
(a) the complainant is not entitled to present the complaint; or
(b) the complainant is barred by limitation under the provisions of this Code
(c) the complainant fails to comply the directions given by the Enquiry Officer under sub-section (2) of
section 85.
(ii) The Enquiry Officer may refuse to entertain complaint which is otherwise incomplete. He may ask
complainant to rectify the defects and if the Enquiry Officer thinks that the complaint cannot be rectified he
may return the complaint indicating the defects and, if he, so refuses shall return it at once indicating the
defects. If the complaint is presented again, after the defects have been rectified, the date of representation
shall be deemed to be the date of presentation for the purpose of sub-section (1) of section 85.
(10) Record of proceedings.— The Enquiry Officer shall in all cases mention the particulars at the time of passing of
order containing the details, i.e., date of complaint, name and address of the complainant, name and address of
the opposite party or parties, section-wise details of the offence committed, plea of the opposite party, findings
and brief statement of the reason and penalty imposed with signature, date and place.
(11) Exercise of powers.—In exercise of the powers of a Civil Court, conferred under the Code of Civil Procedure,
1908, the Enquiry Officer shall be guided in respect of procedure by relevant orders of the First Schedule of the
Code of Civil Procedure, 1908, with such alterations as the Enquiry Officer may find necessary, not affecting their
substance, for adapting them to the matter before him, and save where they conflict with the express provisions of
this Code or these rules.
(12) Order or direction when to be made.—The Enquiry Officer, after the case has been heard, shall make the
order or direction on a future date to be fixed for this purpose.
(13) Inspection of documents.—Any person, who is either a complainant or an opposite party or his
representative, or any person permitted under sub-rule (3) shall be entitled to inspect any complaint, or any other
document filed with the Enquiry Officer be, in a case to which he is a party.

Disciplinary Enquiry
 Stages
o Preliminary Enquiry
- EO to read the charge sheet to the CSW
- Ask if the CSW pleads guilty.
- If not he can proceed with the enquiry after recording
this fact.
o Charge Sheet
- A document which formally communicates to the
workman the omissions or commissions alleged against him.
 - It explains the misconduct in detail. It should have a reference to the SO under which the workman is being
charged.
- The Disciplinary Authority issues the charge sheet
 Service of Charge Sheet
 Suspension pending enquiry

ENQUIRY PROPER
 Prelim Enquiry
 Examination
- PO to present the case
- Names of the witnesses to be given
- If the PO wants to be a witness, the EO can examine him . Here the PO should be examined before all
the other witnesses.
- Examination of the MW
- Cross examination by the MW
- Re-examination
The MW / DW can be examined.
To produce the DW is the sole responsibility of the CSW

 Marking of documents
- Complaint, charge sheet, notice of enquiry should be marked as M1, M2, M3 and documented.
- The documents should be presented to the parties first then marked.
 Closure
- Summing- up of arguments
- Clarification sought by EO
 Findings of the EO
• Brief narration of the case, parties present, witnesses.
• Appreciation of material evidence
• Inference of the EO regarding the material facts. Should state whether the charges have been proved or
not solely based on the material on record and the enquiry proceedings.
• Should not recommend punishment.

Punishment - Culpa peona par esto : Let the punishment be proportioned to the offence
Domestic Enquiry
• Enquiry Officer
• Procedure for Domestic Enquiry
• Report of Enquiry Officer
• Show cause notice

• EO – enquiry officer
• PO – Presenting officer
• CSW – Charge sheeted workman
• DC – Defense counsel

42. SUBMISSION OF A COPY EACH OF THE FORM TO THE OFFICE OF DIRECTOR GENERAL, LABOUR BUREAU
UNDER CLAUSE (ZZF) OF SUB-SECTION 2 OF SECTION 99. – A copy each of Form VII (notice of strike), Form VIII
(notice of lockout), Form IX (notice for intimation of retrenchment or closure to the Central Government), Form X
(Application for permission of lay-off or retrenchment or closure), and Form XI (compounding of offences), shall be
shared electronically with Director General, Labour Bureau in auto-mode .

IRC 2(Q) "INDUSTRIAL DISPUTE" means any dispute or difference between employers and employers or between
employers and workers or between workers and workers which is connected with the employment or non-
employment or the terms of employment or with the conditions of labour, of any person and includes any dispute
or difference between an individual worker and an employer connected with, or arising out of discharge, dismissal,
retrenchment or termination of such worker;
IDA 2(K) "INDUSTRIAL DISPUTE" means any dispute or difference between employers and employers or between
employers and workmen, or between workmen and workmen, which is connected with the employment or non-
employment or the terms of employment or with the conditions of labour, of any person;

IDA 2A DISMISSAL, ETC., OF AN INDIVIDUAL WORKMAN TO BE DEEMED TO BE AN INDUSTRIAL DISPUTE.

Dismissal, etc., of an individual workman to be deemed to be an industrial dispute.- Where any employer
discharges, dismisses, retrenches, or otherwise terminates the services of an individual workman, any dispute or
difference between that workman and his employer connected with, or arising out of, such discharge, dismissal,
retrenchment or termination shall be deemed to be an industrial dispute notwithstanding that no other workman
nor any union of workmen is a party to the dispute

 The term ‘non-employment’ is not defined in the Industrial Relations Act. It is a negative of employment
and will come into being in various forms. It will rise when the employer dismisses an employee or declines
to employ him or contemplates turning him out who is already in employment or refuses to give work to
an employee who is entitled to work, or suspends him.
 An industrial dispute typically begins from the point of a dispute/ difference.
 In case the conciliation officer, at the behest of the workman, approaches the employer who rejects the
demand even then we can say that there is an ID.
 appreciable number of workmen:
o It is based on case by case and there is no uniformity on this issue.
o Whether the appreciable number of workmen has met or not is up to the adjudicating authority
o But in case the support is withdrawn after the reference, in such a case it does not change the
status of the dispute.
o “a substantial number of workmen”, “appreciable number of workmen ”
o Appreciable number of course does not mean majority.
o In case where the dispute has the backing of 20-25 % of the workers it is considered appreciable
number but when it was 5 out of sixty the number was considered to be not enough.

IRC 2(b) "APPROPRIATE GOVERNMENT" means,—

(i) in relation to any industrial establishment or undertaking carried on by or under the authority of the Central
Government or concerning any such controlled industry as may be specified in this behalf by the Central
Government or the establishment of railways including metro railways, mines, oil fields, major ports, air transport
service, telecommunication, banking and insurance company or a corporation or other authority established by a
Central Act or a central public sector undertaking, subsidiary companies set up by the principal undertakings or
autonomous bodies owned or controlled by the Central Government including establishments of the contractors
for the purposes of such establishment, corporation, other authority, public sector undertakings or any company in
which not less than fifty-one per cent. of the paid-up share capital is held by the Central Government, as the case
may be, the Central Government.
Explanation.—For the purposes of this clause, the Central Government shall continue to be the appropriate
Government for central public sector undertakings even if the holding of the Central Government reduces to less
than fifty per cent. equity in that public sector undertaking after the commencement of this Code;
(ii) in relation to any other industrial establishment, including State public sector undertakings, subsidiary
companies set up by the principal undertaking and autonomous bodies owned or controlled by the State
government, the State Government:
Provided that in case of a dispute between a contractor and the contract labour employed through the contractor
in any industrial establishment where such dispute first arose, the appropriate Government shall be the Central
Government or the State Government, as the case may be, which has control over such industrial establishment;

• Relevance
• Administration of the Act
• It has the power to make rules, make references etc.
• Political, convenience, legal forum selection.
• Conflict of jurisdiction between 2 or more state appropriate government: Guidelines :
o Where does the order Operate
o Is there some nexus between the ID arising from service of the workman and the territory of the
state
o Rule of CPC regarding jurisdiction is also applicable.
IRC 2(k) "CONTROLLED INDUSTRY" means any industry the control of which by the Union has been declared by
any Central Act to be expedient in the public interest;
The industries (development and regulation) act, 1951 in its schedule list the Control Industry.

DUTY TO GIVE NOTICE UNDER SECTION 9A OF THE INDUSTRIAL DISPUTES ACT, 1947
Fourth Schedule of the act defines the entitlements on what issues the employer is free to make certain changes in
the working condition of the workmen.
- the basic idea behind the purpose of this section is, that, a notice in the name of the employer to the
workman should be duly given in the event when an employer wants to implement in any change in the
service to be provided by the workman to the employer.
- The notice shall be in coherence to Fourth Schedule of the Act of 1947; eleven items that should be
considered by the employer while proposing in the change in the working condition or services

1. There should be an inclusion of wages for the prescribed period giving in the payment method;
2. Detailing of the contribution of the sum amount that is paid by the employer in the Provident fund;
3. General compensation and other exempted allowances;
4. Specific working and resting hours of the employee;
5. Whenever there is a condition that seemingly arises for a worker to not come to job for a day, then in those
cases, the wages of the workman should not be compromised. In cases where there is change in the day of holiday
and it shifts from Sunday to any other day, then that case, item 4 and 5 should come into play. Vice versa if there is
any other change by keeping Sunday as the main holiday then in that case item number 8 shall be considered.
Therefore in the case of Tata Iron and Steel Co. Ltd. v. Workmen, it was held that, it shall not be considered to be
good in law and legally sound if the employer compels the worker to change the terms of the service without
complying to the ingredients mentioned under Section 9A of the Industrial Disputes Act, 1947.
Remaining items mentioned under Fourth Schedule do mention about:
6. Working condition in accordance to standing orders,
7. Grade classification of the workers,
8. Privilege compromise of workers,
9. Development of plant.

- this section plays the role of a guardian angel by giving proper time to the employee working to consider
the new terms and if necessary to pose reasonable questions before the employer regarding the same
- it is important to duly consider the provision and the items that are present in fourth schedule of the act or
else if the workman is retrenched and if it is not in coherence to fourth schedule then, the benefit of
section 9A is prohibited
- The notice should be given to the workmen in the format as specified under the act and also the contents
should match as present in fourth schedule
- The notice should be given to the workmen in the period before twenty one days
- certain conditions wherein there is no requirement of notice to be provided to the workmen,
o The people who are outside the scope of governance of this act are unlikely to be given notice
under Section 9A of the act;
o The notice shall not be given in case when there is ample option available to the worker but he
decides to reside with the existing terms of the employment;
o The notice and the requirement henceforth mentioned in the section 9A, can’t be used if the
employee entered in the contract with the employer after the coming up of the said act, which
was brought into effect for the first time since.
- termination of the service on the part of employer is not change in the condition to provide the service

- With respect to the transfer of the employee, it should be done post the inter-departmental enquiries that
an employer is obliged to make, there are some conditions of transfer which are as follows:
o Transfer can’t be done if transfer is not in coherence to the standing order or to the terms under
which the employee signed;
o Transfer should be prejudicing the rights of the employee;
o The transfer shall not be under the scope of colorable legislative practice so as to harass the
employee;
 o The transfer of an employee at a relatively higher post to the relatively low (?) should not be
done and if done then should be questioned.
- there are certain cases where there was transfer of the employee of the employer between different
branches of the same corporation, these kind of transfer are in the following manner
o A particular inter-department transfer of the employee cannot be made by the employer if the
contract mentions about this and if the contract is negating such kind of transfer and if there is
no mention about the same kind of transfer in the orders published by the government through
the orders in official gazette,
o No provision in contract of service or appointment letter; notice becomes imperative
o The nature of the transfer made by the employer of the employee should not be depleting of the
rights of the worker unless and until it is specifically mentioned by the expressive consent,
o There shall be no practice of hurting or making the worker a victim, the use of this kind of power
should be direct and should not be having an essence of a colorable exercise by the employer,
the act of the employer shall not be against the wishes and working environment which a
particular worker considers to be healthy,
o The employer should not be using crooked practices like, the transfer made for the sole purpose
to degrade the position of the worker and making him work in unsustainable working conditions.
- It should be never considered implied that the transfer of a particular employer can be made by the
employer for the company started therein by the employer subsequent, also the employer of the
corporation do not have any vested right in him, to do any kind of act as mentioned above.
- There are considerately two types of allowances, which are, compensatory and key.
o The compensatory type of allowance are the one which an employer gives to the worker when
the worker is going to another place to work for the company, also the losses that are incurred
by the worker that are, the travelling and living are included under this head.
o Under the key allowance head, the salary and other remunerations are included by the employer
to the employee
- Schedule IV item no. 11 where it is stated about the cut in the pay-grade of an employee by the employer,
the changes can be made in respect to that particular item but the pandemic has made this more relevant
now - the worker is having a right to get a 50% allowance which is also inclusive of the salary; The provision
of laying off the salary and the coherent inference to the item 11 of the schedule four is v alidly applicable
to industries and factories only.
- The notice that is given to the worker is for the sole purpose to stop the unilateral decisions to be made by
the employer; The principle of good conscience, equity are bestowed in this particular section;

DISMISSAL OF EMPLOYEES ON THE GROUNDS OF NON-PERFORMANCE' – WHETHER LEGALLY SANCTIONED?

- The legal obligations and pre-conditions which an employer should take into consideration while
terminating an employee on the grounds of non-performance.
- Employees that primarily discharge (i) administrative or managerial functions or (ii) those rendering
supervisory functions and earning more than the prescribed threshold are not considered to be workmen
- The Industrial Disputes Act, 1947 ("IDA") is the key federal statute that governs industrial relations in India
and grants certain special protections to workmen (as compared to the non-workmen category of
employees) in case of termination of their employment including their retrenchment.
- it may be imperative to examine whether termination of a workman on the grounds of non-performance
attracts the statutory provisions of 'retrenchment' (as defined under the IDA) or would fall within ambit of
the said exception of misconduct (i.e. the case of punishment being inflicted by way of disciplinary action)
- The word misconduct - its reflection receives its connotation from the context, the delinquency in its
performance and its effect on the discipline and the nature of the duty. It may involve moral turpitude, it
must be improper or wrong behaviour, unlawful behaviour, wilful in character, forbidden act, a
transgression of established and definite rule of action or code of conduct but not mere error of judgment
carelessness or negligence in performance of the duty
- Termination on the basis of unsatisfactory service does not invite an inquiry (for misconduct). - clearly
suggest that termination of a workman on the grounds of unsatisfactory performance do not invite the
statutory provisions and procedures relating to misconduct.
- the term 'retrenchment' was finally held to mean the termination by the employer of the services of a
workman for any reason whatsoever (without limiting the criterion for retrenchment to the extent of
superfluity of labour or staff) except those specifically excluded from the definition
 TERMINATION OF NON-WORKMAN
- every state has its independent Shops and Commercial Establishments Act ("S&EA") which regulates
employment conditions in shops and commercial establishments
- Termination of non-workmen category of employees (working in a shop or commercial establishment) are
broadly governed by the provisions of S&EA being applicable to the respective employee, read with terms
and conditions of the employment contract executed between the parties.
- an employee is entitled to notice of one month or wages in lieu of notice if the employer wishes to
dispense with the services of that employee except in case of misconduct.
- on account of misconduct, an employee is not entitled to any notice or payment in lieu thereof
- The said enactments define misconduct to include acts of theft, fraud, misappropriation or dishonesty in
connection with the employer's business or property. The scope of the said definition has however not
been extended to capture the circumstance of inefficiency or unsatisfactory performance by the employee.
- it may be concluded that the said notice period is a pre-condition for terminating an employee, including
the case of termination on the grounds of inefficiency or unsatisfactory performance.

PRE-CONDITION FOR INITIATING THE TERMINATION PROCEDURE

- An employee may challenge / dispute the case of his or her termination by the employer (on account of
non-performance) mainly on two grounds, namely by questioning the procedural aspect (of the
termination) and by denying existence of the element of non-performance.
- a termination may construe to be bad in law if the employer fails to prove (in the respective forum) the
existence of the alleged grounds amounting to termination.
- Indian courts have generally been witnessed to take into consideration the warnings / communications
made by the employer to the employee concerning the deficiency in the services
- cases where communication is found to be insufficient in this regard, the same may be construed to be
arbitrary exercise of employer's power;
- an informal, if not formal, give-and-take, on the assessment of work of the employee should be there -
employee should be made aware of the defection in his work and deficiency in his performance; timely
communication of the assessment of work in such cases may put the employee on the right track
- Without any such communication, it would be arbitrary to give a movement order to the employee on the
ground of unsuitability
- it is advisable for the employers to establish and record a formal line of communication with the
employees with respect to their performance evaluation.

DO IT PROFESSIONALS COME WITHIN THE AMBIT OF “WORKMAN” UNDER THE INDUSTRIAL DISPUTES ACT?
"It cannot be denied that the job of an engineer in a software company involves skills and technical knowledge.
Therefore it can be concluded that the job of a software engineer can be termed as the skilled or technical one."
"any person doing a skilled job is a workman under the definition of that term. So I conclude that the petitioner is a
workman,"
- whether the concerned employee is a workman same can only be adjudicated by the Industrial Tribunal or
Labour Court having adjudicatory power.
- a person to be qualified to be a workman must be doing the work which falls in any of the four categories,
viz., manual, clerical, supervisory or technical ; confined to those facts
- the position in law as it obtains today is that a person to be a workman under the ID Act must be employed
to do the work of any of the categories, viz., manual, unskilled, skilled, technical, operational, clerical or
supervisory. It is not enough that he is not covered by either of the four exceptions to the definition
- In case of multifarious functions, the nature of the main function performed by the person has to be
considered to determine if the person is a "workman." Designation is not a conclusive factor in determining
the nature of work of a person
- work performed, the principal nature of duties and functions will determine whether the person will fall
under the purview of workman
- If a person is mainly doing supervisory work but incidentally or fraction of time also does clerical or
technical job as the case may be it would be held he is employed in supervisory work; if his main work is
clerical and/or technical but at the same time performs some supervisory job incidentally his supervisory
functions he will be treated as a workman
- If the man is employed because he possesses such faculties and they enable him to produce something as a
creation of his own he will have to be held to be employed on technical work, even though, in carrying out
that work, he may have to go through a lot of manual labour. If, on the other hand, he is merely employed
 in supervising the work of others, the fact that, for the purpose of proper supervision, he is required to have
technical knowledge will not convert his supervisory work into technical work. The work of giving advice
and guidance cannot be held to be an employment to do technical work."
- Work that need imaginative or creative quotient are treated differently by the Courts : The respondent was
not performing any Stereotype job. His job involved creativity. He not only used to render legal opinions on
a subject but also used to draft pleadings on behalf of the appellant as also represent it before various
courts/authorities. He would also discharge quasi-judicial functions as an Enquiry Officer in departmental
enquiries against the workmen. Such a job, in our considered opinion, would not make him a workman"
- The main argument that goes in favour of the Software professional is that they perform the job which is
technical in nature and therefore they should fall with the purview of workman
- There is no difficulty in treating a person as workman under the Act when he is performing technical job
which is stereo type in nature (especially in BPO) as this kind of job does not require imaginative or creative
faculties or extensive training or mastery
- to be a workman under the Act it is not enough that the concerned person is not covered by any of the
four exceptions to the definition
- A person may be doing a technical job but may need imaginative and creative faculties for performing the
job. Such persons will be excluded from the purview of the definition of workman;
- Persons whose main functions are managerial and supervisory will also remain outside the purview of the
definitions of Workman
- employees giving advice and technical guidance or otherwise cannot be held to do the job of the Workman
- Medical professional treating patients and diagnosing diseases cannot be held to be a workman - emphasis
on the distinction between occupation and profession
- “Distinction between occupation and profession is of paramount importance. An occupation is a principal
activity related to job, work or calling that earns regular wages for a person and a profession, on the other
hand, requires extensive training, study and mastery of the subject, whether it is teaching students,
providing legal advice or treating patients or diagnosing diseases. Persons performing such functions
cannot be seen as a workman within the meaning of section 2 (S) of the ID Act.”
- Their status as workmen will be determined by their Job description, responsibilities, creativeness required
to perform the job and the kind of training they had to undergo for performing the job. However, nothing
can be said with certainty till a case is put to judicial scrutiny as each case will be determined by its own
merits.

DIFFERENT CATEGORIES OF INDUSTRIAL DISPUTES

The Second Schedule of the I.D. Act deals with matters within the jurisdiction of Labour Courts, which fall under
the category of Rights Disputes. Such disputes are as follows:
1. The propriety or legality of an order passed by an employer under the standing orders;
2. The application and interpretation of standing orders which regulate conditions of employment.
3. Discharge or dismissal of workmen including reinstatement of, or grant of relief to, workmen wrongfully
dismissed;
4. Withdrawal of any customary concession or privilege;
5. Illegality or otherwise of a strike or lock-out; and
6. All matters other than those specified in the Third Schedule.

The Third Schedule of the I.D. Act deals with matters within the jurisdiction of Industrial Tribunals which could be
classified as Interest Disputes. These are as follows:-
1. Wages, including the period and mode of payment;
2. Compensatory and other allowances;
3. Hours of work and rest intervals;
4. Leave with wages and holidays;
5. Bonus, profit sharing, provident fund and gratuity;
6. Shift working otherwise than in accordance with standing orders;
7. Classification by grades;
8. Rules of discipline;
9. Rationalization;
10. Retrenchment of workmen and closure of establishment; and
11. Any other matter that may be prescribed.
Who can raise an Industrial Dispute?
- Any person who is a workman employed in an industry can raise an industrial dispute. A workman includes
any person (including an apprentice) employed in an industry to do manual, unskilled, skilled, technical,
operational, clerical or supervisory work for hire or reward. It excludes those employed in the Army, Navy,
and Air Force and in the police service, in managerial or administrative capacity.
- Industry means any business, trade, undertaking, manufacture or calling of employers and includes any
calling, service, employment, handicraft, or industrial occupation or avocation of workmen
- A workman can raise a dispute directly before a Conciliation Officer in the case of discharge, dismissal,
retrenchment or any form of termination of service. In all other cases listed at 2 above, the dispute has to
be raised by a Union / Management

Conciliation Officers and what do they do?

- The Organization of the Chief Labour Commissioner (Central) acts as the primary conciliatory agency in
the Central Government for industrial disputes.
- There are the Regional Labour Commissioners (Central) and Assistant Labour Commissioners (Central)
who on behalf of the Chief Labour Commissioner (Central) act as Conciliatory Officers in different parts of
the country.
- The Conciliation Officer makes efforts to resolve the dispute through settlement between the workmen
and the management.
- The duties of Conciliation Officers have been laid down under Section 12 of the Industrial Disputes Act.
1. Where any industrial dispute exists or is apprehended, the conciliation officer may, or where the
dispute relates to a public utility service and a notice under section 22 has been given, shall hold
conciliation proceedings in the prescribed manner.
2. The conciliation officer shall, for the purpose of bringing about a settlement of the dispute,
without delay, investigate the dispute and all matters affecting the merits and the right
settlement thereof and may do all such things as he thinks fit for the purpose of inducing the
parties to come to a fair and amicable settlement of the dispute.
3. If a settlement of the dispute or of any of the matters in dispute is arrived at in the course of the
conciliation proceedings the conciliation officer shall send a report thereof to the appropriate
Government or an officer authorised in this behalf by the appropriate Government together with
a memorandum of the settlement signed by the parties to the dispute.
4. If no such settlement is arrived at, the conciliation officer shall, as soon as practicable after the
close of the investigation, send to the appropriate Government a full report setting forth the
steps taken by him for ascertaining the facts and circumstances relating to the dispute and for
bringing about a settlement thereof, together with a full statement of such facts and
circumstances, and the reasons on account of which, in his opinion, a settlement could not be
arrived at.
5. If, on a consideration of the report referred to in subsection (4), the appropriate Government is
satisfied that there is a case for reference to a Board, Labour Court, Tribunal or National Tribunal,
it may make such reference. Where the appropriate Government does not make such a
reference it shall record and communicate to the parties concerned its reasons therefor.
6. A report under this section shall be submitted within fourteen days of the commencement of the
conciliation proceedings or within such shorter period as may be fixed by the appropriate
Government:
Provided that, subject to the approval of the conciliation officer, the time for the submission of
the report may be extended by such period as may be agreed upon in writing by all the parties to
the dispute.

In case of failure of conciliation (FOC) a report is sent to Government (IR Desks in Ministry of Labour). The Ministry
of Labour after considering the FOC Report exercises the powers available to it under Section 10 of the Industrial
Disputes Act and either refers the dispute for adjudication or refuses to do so. Details of functions of IR Desks and
reasons for declining may be seen above.

There are at present 17 Central Government Industrial Tribunals-cum-Labour Courts in different parts of the
country to whom industrial disputes could be referred for adjudication. These CGTIs-cum-Labour Courts are at
New Delhi, Mumbai (2 CGITs), Bangalore, Kolkata, Asansol, Dhanbad (2 CGITs), Jabalpur, Chandigarh, Kanpur,
Jaipur, Lucknow, Nagpur, Hyderabad, Chennai and Bhubaneshwar. Out of these CGITs, 2 CGITs namely Mumbai-I
and Kolkata have been declared as National Industrial Tribunals.

After the matter is referred to any of the CGIT-cum-Labour Court, the adjudication process begins. At the end of
the proceedings an Award is given by the Presiding Officer. The Ministry of Labour under Section 17 of the I.D. Act
publishes the Award in the Official Gazette within a period of 30 days from the date of receipt of the Award.

An Award becomes enforceable on the expiry of 30 days from the date of its publication i n the Official Gazette. The
Regional Labour Commissioner is the implementing authority of the Awards.

Provisions for General Prohibition of Strikes and Lockouts?

No workman who is employed in any industrial establishment shall go on strike in breach of contract and no
employer of any such workman shall declare a lockout:
(a) During the pendency of conciliation proceedings before a Board and seven days after the conclusion of
such proceedings,
(b) During the pendency of such proceedings before a Labour Court, Tribunal or National Tribunal and 2
months after the conclusion of such proceedings.
(c) During the pendency of arbitration proceedings before an Arbitrator and 2 months after the conclusion
of such proceedings, where a notification has been issued.
(d) During any period during in which a settlement or Award is in operation in respect of any of the
matters covered by the settlement of Award.

Right to go on strike with proper notice in Public Utility Services

No person employed in a Public Utility Service can go on strike without giving to the employer notice of strike;
- Within 6 weeks before striking.
- Within 14 days of giving such notice.
- Before the expiry of the date of strike specified in such notice.
- During the pendency of any conciliation proceedings before a Conciliation Officer and 7 days after the
conclusion of such proceedings.

Employer have the right to lock out any Public Utility Service
No employer carrying on any Public Utility service can lockout any of his workman:
- Without giving to them notice of lockout provided within 6 weeks before locking out.
- Within 14 days of giving such notice.
- Before expiry of the date of lockout specified in any such notice.
- During the pendency of any conciliation proceedings before a Conciliation Officer and 7 days after the
conclusion of such proceedings.

Compensation will a workman get when laid off

Whenever a workman (other than a badli workman or a casual workman) whose name is borne on the muster rolls
of an industrial establishment employing 50 or more workmen on an average working day and who has completed
not less than one year of continuous service under an employer laid off, whether continuously or intermittently, he
is to be paid by the employer for all days during which he is so laid off, except for such weekly holidays as may
intervene, compensation which shall be equal to fifty per cent of the total of the basic wages and dearness
allowance that would have been payable to him had he not been so laid-off.

Conditions precedents to retrenchment of workmen

No workmen employed in any industry that has been in continuous service for not less than one year under an
employer can be retrenched by that employer until: The workman has to be given one month’s notice in writing
indicating the reasons for retrenchment or the workman has to be paid in lieu of such notice, wages for the period
of the notice. The workman has to be paid, at the time of retrenchment, compensation which is equivalent to
fifteen days’ average pay (for every completed year of continuous service) or any part thereof in excess of six
months; and Notice in the prescribed manner is to be served on the appropriate Government (or such authority as
may be specified by the appropriate Government by notification in the Official Gazette).

What the workman gets when an undertaking closes down

Where an undertaking is closed down for any reason whatsoever, every workman who has been in continuous
service for not less than one year in that undertaking immediately before such closure is entitled to notice and
compensation in accordance with the provisions as if the workman had been retrenched. Provided that where the
undertaking is closed down on account of unavoidable circumstances beyond the control of the employer , the
compensation to be paid to the workman is not to exceed his average pay for three months.

LAYOFF
- Right of layoff compensation has been established by practise contract, standing orders, or statutory
provisions.
- Section 25M (Prohibition of lay-off); (IRC Sec 78) was inserted through an amendment in 1976 which
made the prior approval of appropriate government necessary before layoff
in industrial establishments employing 100 or more workmen; unless such lay-
off is due to shortage of power or to natural calamity, and in the case of a
mine, such lay-off is due also to fire, flood, excess of inflammable gas or
explosion
- Applies to industrial establishment where not less than 100 (300 under the
IRC,2020) workmen are employed.
- No workmen should be laid –off without the prior permission of the
appropriate government.(The appropriate govt. u/sec.25 M (1) is the Chief
Labour Commissioner)

Standing Orders – Lay-off

• The SO may provide for grounds for lay-off. In such cases the SO needs to be
followed.
• In case the grounds are not so mentioned then the ID act will be applicable.

Application for permission for lay-off under section 25M

• Rule 75B explains the procedure for permission
• Permission to be sought in Form O-3
• Info in the annexure needs to be provided only if required by the appropriate government.
• Where permission to lay-off has been granted by the said authority, the employer concerned shall give to
the Regional Labor Commissioner (Central) concerned, a notice of commencement and termination of
such lay- off in Forms O-1 and O-2 respectively
• Before deciding to grant or refuse permission the App. Govt. should
1. Make an inquiry into the matter
2. To give reasonable opportunity to the workmen and the employer to be heard---here too the
principles of natural justice needs to be followed
3. To consider the
o Genuineness of the reason for the lay-off
o Interest of the workmen
4. Record reasons for granting or refusing permission
5. To communicate the reason to the employer and workmen
• The decision of the appropriate authority is subject to review by the Tribunal

Penalty for lay-off without permission – Section 25 Q

Any employer who contravenes the provisions of section 25M or section 25N shall be punishable with
imprisonment for a term which may extend to one month, or with fine which may extend to one thousand rupees,
or with both.

COMPENSATION
• In case the SO do provide for lay-off compensation then the same would be decided based on the SO
• In case of conflict between the SO and the ID, then the layoff clause in the statute will have precedence.
• If the SO has only grounds for lay-off and the manner in which compensation should be paid is not
provided then the ID should be referred.

When the workmen is not entitled to any compensation.

1. If he refuses to accept alternate employment in the same establishment from where he has been retrenched,
or any other establishment belonging to the same employer situated in the same town or village within a
radius of 5 miles from the given establishment.
a. It should be without any loss in wages
b. No special skill required.
2. If such lay-off is due to a strike or slowing –down of production on the part of workmen in another part of the
establishment. However the term “another part of the establishment” has not been defined.
“another part of the establishment” to be decided based on
i. Unity of ownership
ii. Supervision by the same employer
iii. Finance
iv. Management and employment
v. Geographical proximity
vi. General unity of purpose and functional integrity with particular reference to industrial
process.