Dear Seniors/ Friends,

I am facing a lot of confusion on a matter, even after reading several case laws (SC and High Courts).

The matter seems not to be dealt with by these courts - probably because it is too simple/ never disputed.

The facts are as below:

- Mr. A hired in October 2019. He was retrenched in July 2020. A total continuous period of service = 10 months. He was a full-time employee.

- On a plain reading of Sec 25C [Right of workmen laid-off for compensation] - "Whenever a 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...".

- Mr. A has clearly not completed one year (or more) of service with the company.

Thus, can we simply conclude that he has not rights under Sec 25C of the ID Act?

Or, the other view is that we should refer to Sec 25B [Definition of continuous service] - sub-section (2) -

"where a workman is not in continuous service within the meaning of clause (1) for a period of one year or six months, he shall be deemed to be in continuous service under an employer —

(a) for a period of one year, if the workman, during a period of twelve calendar months preceding the date with reference to which calculation is to be made, has actually worked under the employer for not less than—

(i) ... and

(ii) two hundred and forty days, in any other case"

Thus, would Sec 25A (2)(a)(ii) apply in this case - and since Mr. A has worked for 10 months i.e. more than 240 days, he should be DEEMED to have worked to a full year and thus the beneficial provisions of Sec 25C - should apply to him as now he is DEEMED to have worked for a full year?

Your kind help in this matter would be very helpful - also if you could please share a reference to case law to substantiate your guidance, it would be extremely useful.

Thanks & best regards,

Jayant

From India, Gurgaon
Hi, look forward to some help please, thanks.
From India, Gurgaon
Dear Jayanth,

Such a confusion of calculating "continuous service" so defined u/s 25-B of the IDA,1947 would be a consequence of the date with reference to which the notional calculation is to be made.

To understand this point, let's revert to Sec.25-B of the Act and dissect it as follows:

Sub-section (1) of Section 25-B generally defines what continuous service rendered by a workman is for the purpose of chapter V-A; it is the period of uninterrupted service rendered under the same employer which includes the interrupted service due to the exhaustive six reasons viz.,(1) sickness, (2) authorised leave, (3) accident, (4) strike which is not illegal (5) lock-out OR (6) cessation of work not due to any fault on the part of the workman.

Chapter V-A deals with the rights of the workmen laid-off for compensation and the conditions precedent to retrenchment which includes the payment of retrenchment compensation too based on the no of years of completed service rendered under the same employer.

Section 25-M(10) as well as 25-N (9) of chapter V-B also speaks respectively about the same.

Sub-section (2) of Sec.25-B deals with the situation in which a workman is not in continuous service within the meaning of sub-section (1) with reference to a particular duration of service namely one year or six months. Since a year comprises of 12 calendar months, this section introduces a fiction to compute the calculation of continuous service comprising of both uninterrupted and authorised interrupted services under ss(1). Thus the minimum no days of service is notionally fixed as 240 days for the preceding 12 months and 120 days for the preceding 6 months.

Now, the date with reference to the notional calculation is to be made is the actual date from which the workman is to be laid-off or to be retrenched respectively. Therefore, to arrive at the 240 days, you have to calculate backwards only and not forward i.e., from the date of appointment. While thus calculating backwards, if you arrive at the minimum required no of days at a particular point, then do not go beyond upto the entire period. In other words, it is NOT NECESSARY that the 240 days shall be scattered over the entire period of 12 months.

THEREFORE, within the 10 months period from October,2019 to July,2020, if 'A' had completed 240 days of continuous service thus explained above on the date of his retrenchment, he is entitled to retrenchment compensation and notice u/s 25-F.

As 25-A(2) pertains to the determination of the question of seasonal industry or the conduct of intermittent nature of work in an industrial establishment, I think that your second query is not relevant to the original issue you raised.

Hope you are convinced.

From India, Salem
Dear Umakanthan Sir,
Thanks so much for your answer and providing a clear explanation and clarification.
Please allow me to summarize our discussion in short, as below:
While Sec 25C [Right of workmen laid-off for compensation] mention that this section applies only to workmen who "has completed not less than one year of continuous service under an employer is laid-off" i.e. completed 1 or more year of continuous service before being laid-off, as per your clarification - even if a workman has worked for 10 continuous months (from Oct 2019 to July 2020 in our example), you mentioned that such a workman shall be entitled to a compensation.
So, as a rule, once a workman completes 240 days of continuous service, he becomes eligible for compensation.
Is this summary correct? Thanks so much again for your guidance.

From India, Gurgaon
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