Question

Section 25-N of the Industrial Disputes Act, 1947 prescribes the conditions precedent to retrenchment of workmen. Section 25-O provides for the procedure for closing an undertaking of an industrial establishment. Under Section 25-N of the Act before retrenchment of workman can be affected two conditions must be fulfilled namely (a) the workman has been given three months’ notice in writing indicating the reasons for retrenchment or paid in lieu of such notice, wages for the said period; and (b) the prior permission of the appropriate Government has been obtained by the employer upon an application having been made. Sub-section (3) of Section 25-N vests power in the State Government to grant or refuse permission to retrench an employee. Section 25-O enjoins an employer, who intends to close an undertaking to apply for prior permission at least ninety days before the date on which the intended closure is to become effective, setting out the reasons for the intended closure and simultaneously serve a copy of such application on the representatives of the workmen in the prescribed manner. Sub-section (9) of Section 25-O provides that where an undertaking is permitted to be closed or permission for closure is deemed to be granted, every workman, who is employed in that undertaking immediately before the date of application for permission under the said section, shall be entitled to receive 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.
Evidently, both Section 25-N and 25-O are couched in a mandatory form. They give effect to the public policy of preventing the exploitation of labour by commanding the employer to follow the defined process for retrenchment of an individual or group of employees or for closure of the establishment as such.
Evidently, both Section 25-N and 25-O are couched in a mandatory form. They give effect to the public policy of preventing the exploitation of labour by commanding the employer to follow the defined process for retrenchment of an individual or group of employees or for closure of the establishment as such.