Labour laws course materials




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NOTES


Continuous service for a period of one year is enough if person has worked for 240 days in a period of 12 months – AIR 1981 SC 422.

25C. Right of workmen laid-off for compensation.- Whenever a workman (other than a badli workman or a casual workman) whose name is borne on the muster rolls of an industrial establishment and who has completed not less than one year of continuous service under an employer is laid-off, whether continuously or intermittently, he shall 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:

Provided that if during any period of twelve months, a workman is so laid-off for more than forty-five days, no such compensation shall be payable in respect of any period of the lay-off after the expiry of the first forty-five days, if there is an agreement to that effect between the workman and the employer:

Provided further that it shall be lawful for the employer in any case falling within the foregoing proviso to retrench the workman in accordance with the provisions contained in section 25F at any time after the expiry of the first forty-five days of the lay-off and when he does so, any compensation paid to the workman for having been laid-off during the preceding twelve months may be set off against the compensation payable for retrenchment.

Explanation.--"Badli workman" means a workman who is employed in an industrial establishment in the place of another workman whose name is borne on the muster rolls of the establishment, but shall cease to be regarded as such for the purposes of this section, if he has completed one year of continuous service in the establishment.

NOTES

A written settlement arrived during conciliation proceeding between parties has a binding effect not only on signatories to settlement but also on all parties to industrial dispute – AIR 1998 SC 554.


25D. Duty of an employer to maintain muster rolls of workmen. - Notwithstanding that workmen in any industrial establishment have been laid-off, it shall be the duty of every employer to maintain for the purposes of this Chapter a muster roll and to provide for the making of entries therein by workmen who may present themselves for work at the establishment at the appointed time during normal working hours.

25E. Workmen not entitled to compensation in certain cases.- No compensation shall be paid to a workman who has been laid-off -

  • (i) if he refuses to accept any alternative employment in the same establishment from which he has been laid-off, or in any other establishment belonging to the same employer situate in the same town or village or situate within a radius of five miles from the establishment to which he belongs, if, in the opinion of the employer, such alternative employment does not call for any special kill or previous experience and can be done by the workman, provided that the wages which would normally have been paid to the workman are offered for the alternative employment also;

  • (ii) if he does not present himself for work at the establishment at the appointed time during normal working hours at least once a day;

  • (iii) if such laying-off is due to a strike or slowing-down of production on the part of workmen in another part of the establishment.

25F. Conditions precedent to retrenchment of workmen.- No workman 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 workman has been given one month's notice in writing indicating the reasons for retrenchment and the period of notice has expired, or the workman has been paid in lieu of such notice, wages for the period of the notice;

(b) the workman has been paid, at the time of retrenchment, compensation which shall be equivalent to fifteen days' average pay for every completed year of continuous service or any part thereof in excess of six months; and

(c) notice in the prescribed manner is served on the appropriate Government or such authority as may be specified by the appropriate Government by notification in the Official Gazette.



NOTES


Termination of workman engaged in a perennial work almost indefinitely for a long period would attract the provisions of S. 25 F – 1998 (1) LLJ 1116.




  • Failure to tender retrenchment compensation along with order of termination would be violative of S. 25-F – Tender should be for Precise amount , made simultaneously with termination – Merely asking worker to come and collect compensation does not satisfy requirement of law – 1999(1) LLJ 997.

  • If the retrenchment is ab inition void, a declaration that the employee continuous to be in service with all consequential benefits with follow – AIR 1981 SC 1253.

  • Dispute regarding termination on ground of violation of S. 25-F. is to be decided by a Court under the I.D.Act and not the writ Court on the ground that termination amounted to violation of Art. 21 of the Constitution- 2000(1) LLJ 456.

  • Termination of a daily wager or casual employee, who has completed 240 days, will amount to retrenchment – 1995 LLR 458 (Ori).

  • But Termination of employees engaged during crushing season for less than 240 days will not amount to retrenchment - 1996 LLR 214 (SC).

  • Even a daily rated workman discharged from service without complying Sec. 25-F of the I.D.Act will be illegal and the workers will be entitled to reinstatement with 50% back wages – 1998 (II) LLJ 674(SC).

  • Retrenchment of workers who could be transferred to other units of the employer will be illegal – 1998 LLR 316 (Ori).

  • Non-members cannot challenge the validity of a settlement made with the recognized union – 1998 LLR 595 (Ori).

  • The prohibition of strike by the Government while referring only a few amongst other demands for adjudication will be without jurisdiction and liable to be set aside – 1991 LLR 181 (Ori).

  • ‘Regular employee’ and ‘casual employee’ – There is no distinction between both – A daily wage earner comes within the definition of workman – 1995 LLR 458(Ori).

  • Nature of duties and not the designation of employee will determine if he is a ‘workman’ under Industrial Dispute Act – 1998 LLR 1119 (Ori).

  • Assistant Secretary performing duties of a Salesman will be a ‘workman’ – 1998 LLR 1119 (Ori).

  • An employee who as opted for voluntary retirement from service and accepted the benefits cannot be treated as a workman – 1999 LLR 932.

  • Holding election of the ‘works committees’ without consultation with the trade union will be liable to be set aside even though Orissa Ind. Dispute Rules do not stipulate to this effect – 1992 LLR 625 (Ori).

Engaged as NMR from 1.5.1984 to 30.4.1987 without break – Refusal to allot any work to the NMR on 1.5.1987 when reported to do his duty – Amounts to be termination – without compliance of Sec. 25)f) – Such termination becomes illegal – 90 (2000) CLT 687.


Since daily –wage-employees have no right to the post therefore disengagement is not arbitrary - 1997 (4) SCC391.
Extra-departmental Agent, governed by statutory regulation are civil servants and not a workman under I.D.Act – AIR 1996 SC 1271.
Retrenchment of workman – Establishment closed – The construction company undertakes works anywhere – Claim of workman of absorption in other units – Cannot claim absorption on completing job in one unit – However Tribunal can grant relief in interest of justice – AIR 1995 SC 1163.

Lenauthorised lave and overstay – Standing order of Termination – Automatic Permination not proper- Compliance of principles of Natural justice – Woman worked 240 days – No permission to join duty – Termination held to be illegal – 2001 (88) FLR 274. Termination of service – Fundamental rights cannot be deprived by mere accepting retrenchment compensation. The High Court as well as the Tribunal intended to say that once retrenchment compensation was accepted by the appellant, the chapter stands closed and it is no longer open to the appellant to challenge his retrenchment – Wholly erroneous. The termination of the appellant was puritive in nature and was in violation of the Principle of natural justice. So such an order cannot be sustained – AIR 2000 SC 1401.


Termination from service – If violative of Sec. 25-F- If found violative, then the order must be set aside and reinstatement will all benefits should be directed – AIR 1998 SC 941.

25FF. Compensation to workmen in case of transfer of undertakings.- Where the ownership or management of an undertaking is transferred, whether by agreement or by operation of law, from the employer in relation to that undertaking to a new employer, every workman who has been in continuous service for not less than one year in that undertaking immediately before such transfer shall be entitled to notice and compensation in accordance with the provisions of section 25F, as if the workman had been retrenched:

Provided that nothing in this section shall apply to a workman in any case where there has been a change of employers by reason of the transfer, if -



  • (a) the service of the workman has not been interrupted by such transfer;

  • (b) the terms and conditions of service applicable to the workman after such transfer are not in any way less favourable to the workman than those applicable to him immediately before the transfer; and

  • (c) the new employer is, under the terms of such transfer or otherwise, legally liable to pay to the workman, in the event of his retrenchment, compensation on the basis that his service has been continuous and has not been interrupted by the transfer.

25FFA. Sixty days' notice to be given of intention to close down any undertaking.-

(1) An employer who intends to close down an undertaking shall serve, at least sixty days before the date on which the intended closure is to become effective, a notice, in the prescribed manner, on the appropriate Government stating clearly the reasons for the intended closure of the undertaking:

Provided that nothing in this section shall apply to -


  • (a) an undertaking in which -

    • (i) less than fifty workmen are employed, or

    • (ii) less than fifty workmen were employed on an average per working day in the preceding twelve months,

  • (b) an undertaking set up for the construction of buildings, bridges, roads, canals, dams or for other construction work or project.

(2) Notwithstanding anything contained in sub-section (1), the appropriate Government may, if it is satisfied that owing to such exceptional circumstances as accident in the undertaking or death of the employer or the like it is necessary so to do, by order, direct that provisions of sub-section (1) shall not apply in relation to such undertaking for such period as may be specified in the order.

25FFF. Compensation to workmen in case of closing down of undertakings.-

(1) 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 shall, subject to the provisions of sub-section (2), be entitled to notice and compensation in accordance with the provisions of section 25F, 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 under clause (b) of section 25F shall not exceed his average pay for three months.

Explanation.--An undertaking which is closed down by reason merely of -


  • (i) financial difficulties (including financial losses); or

  • (ii) accumulation of undisposed of stocks; or

  • (iii) the expiry of the period of the lease or licence granted to it; or

  • (iv) in a case where the undertaking is engaged in mining operations, exhaustion of the minerals in the area in which such operations are carried on;

shall not be deemed to be closed down on account of unavoidable circumstances beyond the control of the employer within the meaning of the proviso to this sub-section.

(1A) Notwithstanding anything contained in sub-section (1), where an undertaking engaged in mining operations is closed down by reason merely of exhaustion of the minerals in the area in which such operations are carried on, no workman referred to in that sub-section shall be entitled to any notice or compensation in accordance with the provisions of section 25F, if -



  • (a) the employer provides the workman with alternative employment with effect from the date of closure at the same remuneration as he was entitled to receive, and on the same terms and conditions of service as were applicable to him, immediately before the closure;

  • (b) the service of the workman has not been interrupted by such alternative employment; and

  • (c) the employer is, under the terms of such alternative employment or otherwise, legally liable to pay to the workman, in the event of his retrenchment, compensation on the basis that his service has been continuous and has not been interrupted by such alternative employment.

(1B) For the purposes of sub-sections (1) and (1A), the expressions "minerals" and "mining operations" shall have the meanings respectively assigned to them in clauses (a) and (d) of section 3 of the Mines and Minerals (Regulation and Development) Act, 1957 (67 of 1957).

(2) Where any undertaking set-up for the construction of buildings, bridges, roads, canals, dams or other construction work is closed down on account of the completion of the work within two years from the date on which the undertaking had been set-up, no workman employed therein shall be entitled to any compensation under clause (b) of section 25F, but if the construction work is not so completed within two years, he shall be entitled to notice and compensation under that section for every completed year of continuous service or any part thereof in excess of six months.


NOTES
Termination from service of an employees at end of probation -
Remark “not found fit to confirm” made by employer – Not malafide – The High Court cannot sit in appeal over assessment made bye employer of performance of employee if it was not malafide – 1998(3) SCC 225; AIR 1998 SC 1431.
Where the project completely wound up and workers retrenched but in view of interim orders of Court salary given without work then workers not entitled to compensation on account of closure of project – AIR 1997 SC 852.
25G. Procedure for retrenchment.- Where any workman in an industrial establishment, who is a citizen of India, is to be retrenched and he belongs to a particular category of workmen in that establishment, in the absence of any agreement between the employer and the workman in this behalf, the employer shall ordinarily retrench the workman who was the last person to be employed in that category, unless for reasons to be recorded the employer retrenches any other workman.

25H. Re-employment of retrenched workmen.- Where any workmen are retrenched, and the employer proposes to take into his employ any persons, he shall, in such manner as may be prescribed, give an opportunity to the retrenched workmen who are citizens of India to offer themselves for re-employment and such retrenched workman who offer themselves for re-employment shall have preference over other persons.

25I. Recovery of moneys due from employees under this chapter.- Rep. by the Industrial Disputes (Amendment and Miscellaneous Provisions) Act, 1956 (36 of 1956), s. 19 (w.e.f. 10-3-1957).

25J. Effect of laws inconsistent with this Chapter.- (1) The provisions of this Chapter shall have effect notwithstanding anything inconsistent therewith contained in any other law including standing orders made under the Industrial Employment (Standing Orders) Act, 1946 (20 of 1946):

Provided that where under the provisions of any other Act or rules, orders or notifications issued thereunder or under any standing orders or under any award, contract of service or otherwise, a workman is entitled to benefits in respect of any matter which are more favourable to him than those to which he would be entitled under this Act, the workman shall continue to be entitled to the more favourable benefits in respect of that matter, notwithstanding that he receives benefits in respect of other matters under this Act.

(2) For the removal of doubts, it is hereby declared that nothing contained in this Chapter shall be deemed to affect the provisions of any other law for the time being in force in any State in so far as that law provides for the settlement of industrial disputes, but the rights and liabilities of employers and workmen in so far as they relate to lay-off and retrenchment shall be determined in accordance with the provisions of this Chapter.


CHAPTER V B

SPECIAL PROVISIONS RELATING TO LAY-OFF, RETRENCHMENT AND CLOSURE IN CERTAIN ESTABLISHMENTS

25K. Application of Chapter VB.- (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 one hundred workmen were employed on an average per working day for the preceding twelve months.

(2) If a question arises whether an industrial establishment is of a seasonal character or whether work is performed therein only intermittently, the decision of the appropriate Government thereon shall be final.



25L. Definitions.- For the purposes of this Chapter, -

  • (a) "industrial establishment" means -

    • (i) a factory as defined in clause (m) of section 2 of the Factories Act, 1948 (63 of 1948);

    • (ii) a mine as defined in clause (i) of sub-section (1) of section 2 of the Mines Act, 1952 (35 of 1952); or

    • (iii) a plantation as defined in clause (f) of section 2 of the Plantations Labour Act, 1951 (69 of 1951);

  • (b) notwithstanding anything contained in sub-clause (ii) of

  • clause (a) of section 2, -

    • (i) in relation to any company in which not less than fifty-one per cent of the paid-up share capital is held by the Central Government, or

    • (ii) in relation to any corporation not being a corporation referred to in sub-clause (i) of clause (a) of section 2 established by or under any law made by Parliament,

the Central Government shall be appropriate Government.

25M. Prohibition of lay-off.- (1) No workman (other than a badli workman or a casual workman) whose name is borne on the muster rolls of an industrial establishment to which this Chapter applies shall be laid-off by his employer except with the prior permission of the appropriate Government or such authority as may be specified by that Government by notification in the Official Gazette (hereinafter in this section referred to as the specified authority), obtained on an application made in this behalf, 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.

(2) An application for permission under sub-section (1) shall be made by the employer in the prescribed manner stating clearly the reasons for the intended lay-off and a copy of such application shall also be served simultaneously on the workmen concerned in the prescribed manner.

(3) Where the workman (other than badli workmen or casual workmen) of an industrial establishment, being a mine, have been laid-off under sub-section (1) for reasons of fire, flood or excess of inflammable gas or explosion, the employer, in relation to such establishment, shall, within a period of thirty days from the date of commencement of such lay-off, apply, in the prescribed manner, to the appropriate Government or the specified authority for permission to continue the lay-off.

(4) Where an application for permission under sub-section (1) or sub-section (3) has been made, the appropriate Government or the specified authority, after making such enquiry as it thinks fit and after giving a reasonable opportunity of being heard to the employer, the workmen concerned and the persons interested in such lay-off, may, having regard to the genuineness and adequacy of the reasons for such lay-off, the interests of the workmen 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 workmen.

(5) Where an application for permission under sub-section (1) or sub-section (3) has been made and the appropriate Government or the specified authority does not communicate the order granting or refusing to grant permission to the employer within a period of 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.

(6) An order of the appropriate Government or the specified authority granting or refusing to grant permission shall, subject to the provisions of sub-section (7), be final and binding on all the parties concerned and shall remain in force for one year from the date of such order.

(7) The appropriate Government or the specified authority may, either on its own motion or on the application made by the employer or any workman, review its order granting or refusing to grant permission under sub-section (4) 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.

(8) Where no application for permission under sub-section (1) is made, or where no application for permission under sub-section (3) is made within the period specified therein, or where the permission for any lay-off has been refused, such lay-off shall be deemed to be illegal from the date on which the workmen had been laid-off and the workmen shall be entitled to all the benefits under any law for the time being in force as if they had not been laid-off.

(9) 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), or, as the case may be, sub-section (3) shall not apply in relation to such establishment for such period as may be specified in the order.

(10) The provisions of section 25C (other than the second proviso thereto) shall apply to cases of lay-off referred to in this section.

Explanation. - For the purposes of this section, a workman shall not be deemed to be laid-off by an employer if such employer offers any alternative employment (which in the opinion of the employer does not call for any special skill or previous experience and can be done by the workman) in the same establishment from which he has been laid-off or in any other establishment belonging to the same employer, situate in the same town or village, or situate within such distance from the establishment to which he belongs that the transfer will not involve undue hardship to the workman having regard to the facts and circumstances of his case, provided that the wages which would normally have been paid to the workman are offered for the alternative appointment also.

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