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Dear members,
In ID Act section 25A of Chapter VA is Applicability of Sections 25C to 25E.
which talks about lay-off and also it tells that sec 25A is applicable to Industrial establishment employing less than 50 workmen.
In a nutshell, sec 25A tells the procedure of lay off to be followed by an industrial establishment employing less than 50 workmen.
Chapter VB is applicable to Industrial establishments in which more than 100 workmen are employed.
Now my question is what procedure is to be followed during lay off by an industrial establishment employing more than 50 and less than 100 workmen. Pls clarify.
Thanks.
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Dear friend,
I think that you have to make a re-reading of sec.25A. Then you'll find that section 25A of the Industrial Disputes Act,1947 in its Chapter V-A clearly speaks about the non-applicability of its certain other sections to certain industrial establishments.They are - (1)those industrial establishments to which Chapter V-B applies or (2) those industrial establishments which employs less than 50 workmen and (3) seasonal establishments. Thus, the non-applicable sections are viz.,
25C dealing with right of workmen laid off for compensation,
25D prescribing the duty of an employer to maintain muster roll of workmen and
25E stating the circumstances under which the laid off workmen are not entitled to compensation
The effect of the non-applicability of the above sections to establishments employing less than 50 workmen by virtue of the operation of sec.25A in essence is that there is no inherent power in the employer of such establishments to lay off their workmen and if they do so they have to pay them full wages for the entire period. That's the ratio decidendi of the judgment of Workmen of M/S Firestone Tyre & Rubber Co. v M/S Firestone Tyre & Rubber Co.,[ AIR 1976 SC 1775 - 1976 (1) LLJ 493 ].
Now, coming to your question of Lay off in an establishment employing more than 50 workmen but less than 100.
By virtue of the total no of workmen in such establishments being less than 100, automatically Chapter V-B does not apply to such establishments. Therefore, the issue of obtaining permission for lay off does not arise.
Again, the no of workmen being above 50, the exclusion of the applicability of ss 25C to 25E is not available to such establishments. In other words, the employer of an industrial establishment having more then 50 but less than 100 workmen on his roll, can lay off them by paying lay off compensation.
Dear Sir,
Thank you so much for clearing my doubt, which reminded for a quite long period in me. As you said so far, I have wrongly interpreted Sec 25A and now your explanation cleared my doubt.
Dear Umakanthan sir,
I'm bit confused about the applicability of ID Act. 2017 whether this act. Will be applicable only on industrial establishment or on every establishment' if so pls interpreted the definition of industrial establishment?
Thanks In Advance
Akhil
Dear Akhil,
Your confusion is quite natural because of the re-occurrence of the same term "Industrial Establishment" in various chapters of the Industrial Disputes Act,1947 with different meanings. But you can certainly dispel this confusion with a little more effort of re-reading with reference to the context wherever it is used.
In common parlance, every establishment carrying on any activity pertaining to an industry is an industrial establishment. Such activities may be that of manufacturing, mining,exploration of oil and allied products,business/trading including buying and selling of goods and commodities, rendering services like transportation of people and goods, telecommunications,hospitality, education, health-care, entertainment etc., commercial activities like banking, non-banking financial activities, insurance and so on.
But the complex nature of social life is such that every activity irrespective of its nature and purpose requires hiring of the services of human beings for some reward that can be either material or otherwise.Take for example the running of a temple or a church. It is basically and essentially a religious activity aiming at spiritual benefits to its followers. But such a religious institution/undertaking may engage itself in certain other activities too like running lodging houses, transportation, renting out buildings, selling of religious artefacts and prasads in large scale etc., analogous to trade or business.It can be separable from the main spiritual activity of the temple or church. Therefore, that particulr severable activity is an industrial establishment. Similarly, the predominant activity of the undertaking being analogous to industry and the other non-industrial activities of the undertaking are not separable, then the entire undertaking is an industrial establishment for the purpose of the ID Act,1947.That is the exact purpose and meaning of the term " industrial establishment " as defined u/s 2(ka) of the ID Act in its chapter I.
Chapter V-A of the Act deals with Lay-off and retrenchment of certain workmen and closure of the establishment generally and specifically with reference to industrial establishments employing less than 100 workmen on an average in a period of 12 months prior to lay-off/ retrenchment/ closure as the case be.
Here, the Act has to differentiate the establishments in terms of the application of this chapter as well as the pre-fixed no of workmen. Therefore there is another definition of the term "industrial establishment" with an explanation of clarifying nature u/s 25-A for the specific purposes of this chapter only. They are (1) those establishments to which chapter-VB does not apply or Such of the Factory or Mine or Plantation where less than 50 workmen are/were employed or a seasonal establishment. For these establishments no necessity for obtaining permission for lay-off or retrenchment or closure is necessary. Regarding compensation for lay-off in these establishments, I've already placed my view on record based on a case law supra. In so far as compensation for retrenchment and closure, sections 25F and 25FFF have to be strictly followed.
Coming to ALL OTHER INDUSTRIAL ESTABLISHMENTS EMPLOYING 01 to 99 workmen, no permission is required for lay-off/retrenchment/closure. But it is mandatory to pay compensations u/s 25-C,25-F and 25-FFF respectively. Besides, ONLY in case of closure those establishments having 50 and above but below 100 workmen on their rolls, it is mandatory that they have to send 60 days PRIOR notice to the Government u/s 25-FFA .
Here, by all OTHER ESTABLISHMENT, I mean EVERY ESTABLISHMENT employing less than 100 workmen other than those industrial establishments mentioned in sec.25-A of chapter V-A AND even THOSE ESTABLISHMENTS employing 100 and more workmen as well other than those as mentioned and defined in sec.25-K and 25-L respectively in chapter V-B of the ID Act,1947.
Regarding chapter V-B, I need not explain in detail about the aspects of lay-off, retrenchment and closure for the concerned provisions are very clear and self-explanatory. However, you should remember that sec.25-S of chapter V-B mandates the application of the general provisions of ss 25B,25D,25FF,25G,25H and 25J of chapter V-A.
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