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Applicability Of Section 25 Of Industrial Disputes Act In Cases Of Voluntary Abandonment
Human Capital
|January 2019
The Industrial Disputes Act, 1947 ("Act") is a legislation which provides for certain safeguards for workmen, including cases of retrenchment. However, very recently, the Hon'ble Supreme Court has laid down the effect of Section 25F of the Act in cases of abandonment of services by the workman.
As per section 2(oo) of the Act, "retrenchment means termination of the services of a workman by the employer 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 nonrenewal 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…"
The Act lays down certain provisions and procedures to be followed by employers in case of retrenchment of workmen. The provisions were incorporated in the Act with the objective of giving reasonable opportunity and time to workmen to seek alternate opportunities in the event of retrenchment. They aim to safeguard the workmen's financial interest such that the employers are required to provide reasonable compensation to workmen for sustenance during such times.
Section 25F of the Act provides for conditions that the employer is required to fulfil before retrenchment of workmen. The said provision provides that no workman who has been in continuous service for not less than one year under an employer shall be retrenched by the employer unless:
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