This action might not be possible to undo. Are you sure you want to continue?
In 1953. These in turn resulted in rationalization of production process and retrenchment of surplus labor.1947 and this chapter applies to industrial establishments which are factories.the situation was met by State interference in regulating the employer s right to retrench their workmen directly through the ministry of labor and indirectly through the Industrial Tribunals. By this amendment a new chapter V b has been added to the ID Act. mines and plantations .1982 extended the provisions of retrenchment to industrial establishments employing 100 workmen.RETRENCHMENT BACKGROUND y With the cessation of World War 2 and re-establishment of normal transport facilities y y y y y y new and improved machinery began to flow in the country. which led to announcement of the Industrial Disputes (Amendment) Act 42 of 1953. the ID (Amendment )Act .1976 was enacted. However.a grave situation arose in textile mills resulting in retrenchment of large number of workers employed therein.the Industrial Disputes (Amendment)Act .employing 300 or more workmen. Though this act provided for notice and retrenchment compensation it did not contain any provision for preventing retrenchment. Till 1953. Consequently . .
2) Retrenchment And Lockout 3) Retrenchment And Lay-off 4) Retrenchment And Closure of business . It is adopted as an economy measure.NATURE OF RETRENCHMENT 1) General Retrenchment generally means "discharge of surplus labor or staff "by the employer on account of long period of lay-off or rationalization or production process or improved machinery or similar other reasons.
Termination of the service of workman on the ground of continued ill.health.STATUTORY DEFINITION OF RETRENCHMENT y Section 2(oo) the id act. y y y y otherwise than as a punishment inflicted by way of disciplinary action. but does not includeVoluntary retirement of the workman Retirement of the workman on reaching the age of superannuation 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.defines Retrenchment as: y The termination by the employer of the service of a workman for any reason whatsoever. .1947.
CASES TERMINATION AS A RESULT OF TRANSFER OF UNDERTAKING :RETRENCHMENT y 1) Barsi Light Railway Co.1936 to the Payment of Wages authority for payment of retrenchment compensation under Section 25 F.1954. the President of India gave notice to the Railway Co.N.the Railway Company served a notice to its workmen that in the view of aforesaid circumstances. v.1952 that the undertaking of the Railway Company would be taken over with effect from 1 Januaury. the services of all the workmen of the Railway Company would be terminated with effect from 31st December.23 percent of the staff were re-employed on somewhat lower scales though the pay which they actually drew at the time of re-employment was not affected. Only about 24 of the former employees of the Railway Company were not taken back by the Government. y It was also stated therein that the Government of India intended to employ those staff of the Company who would be willing to serve the Railways on terms and conditions fixed by the Government. . Joglekar (K.) y Under an agreement.However. Majority of the staff of the Railway Company were re-employed on the same scales of pay.1953. on 19th December. y Soon after Railwaymen s Union filed 61 applications under the Payment of the Wages Act.Consequently.
y On these facts questions arose : y Whether the Authority under the Payment of Wages Act. High Court held that workers had been retrenched and the Railway Company was liable to pay compensation to them. .1936 had jurisdiction to y y y y adjudicate upon the claim of retrenchment compensation? Whether they had been retrenched by their former employee? The Authority held that it had no jurisdiction to deal with the application but held that the workers were entitled to compensation as there had been retrenchment. Aggrieved by this order the Railway men's union moved the Bombay High Court.
Thereafter. The Mill was closed and therefore. the workmen moved the Bombay High Court for issuance of appropriate writ. claiming retrenchment compensation under Section 25F (b) of the ID Act 1947. Divalkar (Dinesh Mills) y The management of Shri Dinesh Mills had decided to close down the y y y y shifts. Thereupon. . its workmen made an application to the Authority under the Payment of Wages Act. It held that the discharge of workmen on closure.TERMINATION AS A RESULT OF CLOSURE: RETRENCHMENT y 2) Hariprasad Shivshankar v. Bombay High Court relying on the decision in Barsi Light Railway Co.1953 and the first shift with effect from 8 january. the services of all workmen shall stand terminated. A.the management gave notice to the workmen intimating that the second shift would be closed with effect from 20 December . held that the discharge of workmen on closure of business was retrenchment .1954 and also mentioned in the notice that as a result of the closure.D. did not constitute retrenchment as defined in section 2(oo) of the ID Act 1947.
She was neither served with a notice required under Section 25 F (a)..except those which are excluded. .nor paid retrenchment compensation under Section 25 F(b). State Bank of Patiala y The bank terminated the services of one of its workman(a woman) who had put in more y y y y y than 240 days of service. the Court accordingly held that the discharge of the workman on the ground that she did not pass the test which would have enabled her to be confirmed was retrenchment .ANY KIND OF TERMINATION: RETRENCHMENT y 3) Santosh Gupta v. Therefore.(deemed continuous service for a year under Section 25B(2)) on the ground of her failure to pass the prescribed test provided for confirmation in service.they simply mean that the retrenchment must include every termination of service of a workman by an act of the employer . On these facts a question arose whether termination of the service of the workman by the bank due to the failure of the workman to pass the prescribed test for confirmation in the service amounted to a retrenchment ? The Court preferred to adopt a broad interpretation to the expression retrenchment and stated: If due weightage is given to the words for any reason whatsoever .
Thereafter he was offered fresh employment on contract basis for a period of 12 months.TERMINATION UNDER A FRESH CONTRACT: NOT RETRENCHMENT y 4) Binoy Kumar Chatterjee v. . a question arose whether the termination of his subsequent service under a fresh contract was retrenchment ? y The Supreme Court held that the termination of service of the workmen under a fresh contract was not a retrenchment . the termination of his service was illegal. the petitioner challenged the validity of the order on the ground that he was neither served a notice nor was paid retrenchment compensation under Section 25 F and therefore. Jugantar Limited y Here the petitioner was re-employed by the company on reaching the age of superannuation. y On these facts. His service was terminated on the expiry of the said period. y Thereupon. He was paid retiral benefits which he willingly received.
. for being absent without any intimation was held to be retrenchment under section 2(oo). Labour Court y Striking off the name of the workman from the attendance register .STRIKING OFF THE NAME OF ABSENTEES:RETRENCHMENT y 5) Arun Mathur v.
Subsequently a dispute was raised by the workman which went up to the Allahabad High Court. Kanpur v. State of UP. y In this case an employee had voluntarily resigned. y On appeal. the Supreme Court held that when a contract or service is terminated on the employee exercising his right to quit. y The court accordingly held that voluntary resignation amounted to voluntary retirement and not retrenchment. such termination cannot be said to be the instance of the retrenchment by the employer. The resignation was accepted by the employer.VOLUNTARY RETIREMENT: NOT RETRENCHMENT y 6)JK Cotton Spinning and Weaving Mills Co. The High Court held it to be a case of retrenchment and ordered payment of retrenchment compensation. Ltd. .
TERMINATION OF SERVICE OF DAILY WAGERS NOT COVERED y 7)Executive Engineer CPWD.it was mentioned that his services could be terminated at any time without giving notice to him. y A question arose whether the termination of his services was retrenchment y The Supreme Court answered the question in negative and held that in the absence of any fixed term mentioned in the letter of appointment he would not be covered under Section 2(oo). In the order of appointment . Indore v. Madhukar Purushottam y The respondent was engaged in Central Public Works Department(CPWD) on daily wages on a purely temporary basis. y The CPWD terminated his services. .
PROJECT EMPLOYMENT-NOT COVERED y 8)Anil Bapurao Kanase v. y The Supreme Court negatived the contention and held that since the work was of seasonal nature. y It was contented that the termination amounted to retrenchment and was made in the violation of Section 25F . the principle of the ID Act 1947 was not applicable. . y In this case. the management terminated the services of an employee working in the Chemistry section of the sugar factory after the crushing season was over. Krishna Sahkari Sakkar Karkhana Ltd.
the Supreme Court held that the respondent workmen were the employees of the Corporation and their retrenchment by Indore Textile Mills was without authority of law since they were not the employees or workmen of Indore Textile Mills. State Textiles Corporation Ltd. .namely.However.on closure of its 1 unit.even though it was stipulated in the letter of appointment that they could be appointed anywhere or transferred to various textile mills.P.RETRENCHMENT OF WORKMEN DUE TO CLOSURE OF A UNIT:NOT RETRENCHMENT y 9)M. the workmen employed therein were retrenched . The award was upheld by the High Court. V.Indore Textile Mills. y On appeal. y Here the Corporation recruited certain workmen and posted them to its different units. y On these facts the Labour Court held the retrenchment to be illegal and directed reinstatement. Mahendra & ors.
the management retrenched 23 workmen. there must be a valid reason for any kind of deviation to this rule.FIRST GO y 10)Workmen of Sudder Workshop of Jourhat Tea Co. y Out of this. y The Tribunal.but. of course.THE RULE OF LAST COME. y The Supreme Court on appeal. this rule is not inflexible and extraordinary situations may justify variations. Management y In this case.therefore. i.e. Ltd. the services of 7 workmen were terminated without following the rule of last come and first go under Section 25 G.set aside the management s order of termination of the 7 workmen and directed their reinstatement with same wages. v. confirmed the findings of tribunal and ruled: y The rule is that the employer shall retrench the workman who came last . .
SOURCE y Industrial Relations and Laws By S C Srivastava .
yTHANK YOU .
This action might not be possible to undo. Are you sure you want to continue?
We've moved you to where you read on your other device.
Get the full title to continue reading from where you left off, or restart the preview.