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    Question

    Under Section 25 of the Industrial Disputes Act, 1947,

    what conditions must an employer satisfy before retrenching workers?
    A Only payment of retrenchment compensation as per formula Correct Answer Incorrect Answer
    B Prior notice to workers and government, payment of compensation, and following prescribed procedures Correct Answer Incorrect Answer
    C Mere written notice without compensation Correct Answer Incorrect Answer
    D Employer's discretion based on business requirements alone Correct Answer Incorrect Answer
    E Compensation payment only if workers are retrenched without fault Correct Answer Incorrect Answer

    Solution

    Section 25 of the Industrial Disputes Act, 1947, safeguards workers' interests during retrenchment by mandating: (1) 30 days' notice to workers and government before retrenchment, (2) payment of compensation equal to 15 days' average wages for each completed year of service, (3) following LIFO (Last-In-First-Out) principle unless otherwise agreed, and (4) retrenchment notices to government. Non-compliance renders retrenchment invalid and workers can claim illegal dismissal. The act protects workers from arbitrary dismissals and ensures financial security during job loss. Government can intervene to prevent retrenchment if satisfied that it is unjustified or unnecessary.

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