Do we need to follow The Industrial Disputes Act 1947 when we terminate workman employment who is working under Contract Labour (Regulation and Abolition) Act, 1970 and Contract Labour (Regulation & Abolition) Central Rules 1971 for any reason - CiteHR
Umakanthan53
Labour Law & Hr Consultant
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Dear Sir,
Do we need to follow The Industrial Disputes Act 1947 when we terminate workman employment who is working under Contract Labour (Regulation and Abolition) Act, 1970 and Contract Labour (Regulation & Abolition) Central Rules 1971 for any reason (i.e. Completion of contract work or Lay-Off or Termination or Retrenchment, etc.,)
The Industrial Disputes Act, 1947
25-F. 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:
159[* * *]
(b) the workman has been paid, at the time of retrenchment, compensation which shall be equivalent to fifteen days' average pay 160[for every completed year of continuous service] or any part thereof more than six months; and
(c) notice in the prescribed manner is served on the appropriate Government 161[or such authority as may be specified by the appropriate Government by notification in the Official Gazette].
The Industrial Disputes Act, 1947
25-C. 158[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.]

Hello Thirumurugan,
Is this info for dealing with active units or for academic knowledge. However -
First and foremost one should be sure whether or not the ID Act is applicable to the Estt. & employee concerned.
2) The grounds under which the retrenchment is being thought of;
3) Conditions prevalent warranting the retrenchment - whether the closure of the Unit etc.
3) Compliance of procedures applicable preceding the retrenchment;
4) Approval of the competent authorities;
5) Ascertainment & disbursal of compensation to the concerned etc.
If you would give full details of the unit and other circumstances it may be able to give our suggestions.
The matter was discussed many a time in this forum and pl.search the links on the subject which you may find on to your right on the screen, to know further info.

this information is dealing with active units
Dear Thirumurugan,
At times, everyone requires re-reading of certain terms used in any Law as well as some provisions provided for therein under some special circumstances so as to understand their import. The term " retrenchment " is one such term as well as a provision to reduce the surplusage of regular workmen in an industrial establishment.
The term "retrenchment" as defined u/s 2(oo) of the ID Act,1947 takes in its sweep all types of termination of the services of a workman by the employer other than those explicitly excluded therein. The conditions precedent to retrenchment as set down u/s 25-F and the procedures therein u/s 25-G and 25-N certainly presuppose a contract of service between the employees proposed to be retrenched and their employer as well as regularity of their employment.
Exactly similar is the situation of lay-off.
As such, can you please say that there exists a contract of service between the Principal Employer and the contract labor engaged by him through a contractor?

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