25A. Application of sections 25C to 25E.—(1) Sections 25C to 25E inclusive 4
[shall not apply to
industrial establishments to which Chapter VB applies, or—]
(a) to industrial establishments in which less than fifty workmen on an average per working day
have been employed in the preceding calendar month; or
(b) to industrial establishments which are of a seasonal character or in which work is performed
only intermittently.
(2) If a question arises whether an industrial establishment is of a seasonal character or whether work
is performed therein only intermittently, the decision of the appropriate Government thereon shall be
final.
5
[Explanation.—In this section and in sections 25C, 25D and 25E, “industrial establishment”
means—
(i) a factory as defined in clause (m) of section 2 of the Factories Act 1948 (63 of 1948); or
(ii) a mine as defined in clause (i) of section 2 of the Mines Act, 1952 (35 of 1952); or
(iii) a plantation as defined in clause (f) of section 2 of the Plantations Labour Act, 1951
(69 of 1951).]
6
[25B. Definition of continuous service.—For the purposes of this Chapter,—
(1) a workman shall be said to be in continuous service for a period if he is, for that period, in
uninterrupted service, including service which may be interrupted on account of sickness or
authorised leave or an accident or a strike which is not illegal, or a lock-out or a cessation of work
which is not due to any fault on the part of the workman;
(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—
1. Ins. by Act 36 of 1964, s. 12 (w.e.f. 19-12-1964).
2. Subs. by Act 36 of 1956, s. 18, for “or Tribunal” (w.e.f. 10-3-1957).
3. Ins. by Act 43 of 1953, s. 3 (w.e.f. 24-10-1953).
4. Subs. by Act 32 of 1976, s. 2, for “shall not apply-” (w.e.f. 5-3-1976).
5. Subs. by Act 48 of 1954, s. 2, for the Explanation (w.e.f. 1-4-1954).
6. Subs. by Act 36 of 1964, s. 13, for section 25B (w.e.f. 19-12-1964).
37
(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) one hundred and ninety days in the case of a workman employed below ground in a
mine; and
(ii) two hundred and forty days, in any other case;
(b) for a period of six months, if the workman, during a period of six 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) ninety-five days, in the case of a workman employed below ground in a mine; and
(ii) one hundred and twenty days, in any other case.
Explanation.—For the purposes of clause (2), the number of days on which a workman has
actually worked under an employer shall include the days on which—
(i) he has been laid-off under an agreement or as permitted by standing orders made under the
Industrial Employment (Standing Orders) Act, 1946 (20 of 1946), or under this Act or under any
other law applicable to the industrial establishment;
(ii) he has been on leave with full wages, earned in the previous years;
(iii) he has been absent due to temporary disablement caused by accident arising out of and in
the course of his employment; and
(iv) in the case of a female, she has been on maternity leave; so, however, that the total period
of such maternity leave does not exceed twelve weeks.]
1
[25C. 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.]
25D. Duty of an employer to maintain muster rolls of workmen.—Notwithstanding that workmen
in any industrial establishment have been laid-off, it shall be the duty of every employer to maintain for
the purposes of this Chapter a muster roll and to provide for the making of entries therein by workmen
who may present themselves for work at the establishment at the appointed time during normal working
hours.
1. Subs. by Act 35 of 1965, s. 5, for section 25C (w.e.f. 1-12-1965).
38
25E. Workmen not entitled to compensation in certain cases.—No compensation shall be paid to a
workman who has been laid-off—
(i) if he refuses to accept any alternative employment in the same establishment from which he
has been laid-off, or in any other establishment belonging to the same employer situate in the same
town or village or situate within a radius of five miles from the establishment to which he belongs, if,
in the opinion of the employer, such alternative employment does not call for any special skill or
previous experience and can be done by the workman, provided that the wages which would normally
have been paid to the workman are offered for the alternative employment also;
(ii) if he does not present himself for work at the establishment at the appointed time during
normal working hours at least once a day;
(iii) if such laying-off is due to a strike or slowing-down of production on the part of workmen in
another part of the establishment.
25F. 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;
1* * * * *
(b) the workman has been paid, at the time of retrenchment, compensation which shall be
equivalent to fifteen days' average pay 2
[for every completed year of continuous service] or any part
thereof in excess of six months; and
(c) notice in the prescribed manner is served on the appropriate Government 3
[or such authority
as may be specified by the appropriate Government by notification in the Official Gazette].
STATE AMENDMENT
Union Territory of Jammu and Kashmir and Ladakh
Section 25F.—In clause (b), for "fifteen days", substitute "thirty days"
[Vide Union Territory of Jammu and Kashmir Reorganisation (Adaptation of Central Laws) Second
Order, 2020, Notification No. S.O. 3465(E), dated (5-10-2020) and Vide Union Territory of Ladakh
Reorganisation (Adaptation of Central Laws) Order, 2020, Notification No. S.O. 3774(E), dated
(23-10-2020).]
4
[25FF. Compensation to workmen in case of transfer of undertakings.—Where the ownership or
management of an undertaking is transferred, whether by agreement or by operation of law, from the
employer in relation to that undertaking to a new employer, every workman who has been in continuous
service for not less than one year in that undertaking immediately before such transfer shall be entitled to
notice and compensation in accordance with the provisions of section 25F, as if the workman had been
retrenched:
Provided that nothing in this section shall apply to a workman in any case where there has been a
change of employers by reason of the transfer, if—
(a) the service of the workman has not been interrupted by such transfer;
1. The proviso omitted by Act 49 of 1984, s. 3 (w.e.f. 18-8-1984).
2. Subs. by Act 36 of 1964, s. 14, for “for every completed year of service” (w.e.f. 19-12-1964).
3. Ins. by s. 14, ibid. (w.e.f. 19-12-1964).
4. Subs. by Act 18 of 1957, s. 3, for section 25FF (w.e.f. 28-11-1956).
39
(b) the terms and conditions of service applicable to the workman after such transfer are not in
any way less favourable to the workman than those applicable to him immediately before the transfer;
and
(c) the new employer is, under the terms of such transfer or otherwise, legally liable to pay to the
workman, in the event of his retrenchment, compensation on the basis that his service has been
continuous and has not been interrupted by the transfer.
1
[25FFA. Sixty days’ notice to be given of intention to close down any undertaking.—(1) An
employer who intends to close down an undertaking shall serve, at least sixty days before the date on
which the intended closure is to become effective, a notice, in the prescribed manner, on the appropriate
Government stating clearly the reasons for the intended closure of the undertaking:
Provided that nothing in this section shall apply to—
(a) an undertaking in which—
(i) less than fifty workmen are employed, or
(ii) less than fifty workmen were employed on an average per working day in the preceding
twelve months,
(b) an undertaking set up for the construction of buildings, bridges, roads, canals, dams or for
other construction work or project.
(2) Notwithstanding anything contained in sub-section (1), the appropriate Government may, if it is
satisfied that owing to such exceptional circumstances as accident in the undertaking or death of the
employer or the like it is necessary so to do, by order, direct that provisions of sub-section (1) shall not
apply in relation to such undertaking for such period as may be specified in the order.]
25FFF. Compensation to workmen in case of closing down of undertakings.—(1) Where an
undertaking is closed down for any reason whatsoever, every workman who has been in continuous
service for not less than one year in that undertaking immediately before such closure shall, subject to the
provisions of sub-section (2), be entitled to notice and compensation in accordance with the provisions of
section 25F, as if the workman had been retrenched:
Provided that where the undertaking is closed down on account of unavoidable circumstances beyond
the control of the employer, the compensation to be paid to the workman under clause (b) of section 25F
shall not exceed his average pay for three months.
2
[Explanation.—An undertaking which is closed down by reason merely of—
(i) financial difficulties (including financial losses); or
(ii) accumulation of undisposed of stocks; or
(iii) the expiry of the period of the lease or licence granted to it; or
(iv) in a case where the undertaking is engaged in mining operations, exhaustion of the minerals
in the area in which such operations are carried on;
shall not be deemed to be closed down on account of unavoidable circumstances beyond the control of the
employer within the meaning of the proviso to this sub-section.]
3
[(1A) Notwithstanding anything contained in sub-section (1), where an undertaking engaged in
mining operations is closed down by reason merely of exhaustion of the minerals in the area in which
such operations are carried on, no workman referred to in that sub-section shall be entitled to any notice
or compensation in accordance with the provisions of section 25F, if—
(a) the employer provides the workman with alternative employment with effect from the date of
closure at the same remuneration as he was entitled to receive, and on the same terms and conditions
of service as were applicable to him, immediately before the closure;
(b) the service of the workman has not been interrupted by such alternative employment; and
(c) the employer is, under the terms of such alternative employment or otherwise, legally liable to
pay to the workman, in the event of his retrenchment, compensation on the basis that his service has
been continuous and has not been interrupted by such alternative employment.
1. Ins. by Act 32 of 1972, s. 2.
2. Subs. by Act 45 of 1971, s. 4, for the Explanation (w.e.f. 15-12-1971).
3. Ins. by s. 4, ibid. (w.e.f. 15-12-1971).
40
(1B) For the purposes of sub-sections (1) and (1A), the expressions “minerals” and “mining
operations” shall have the meanings respectively assigned to them in clauses (a) and (d) of section 3 of
the Mines and Minerals (Regulation and Development) Act, 1957 (67 of 1957).]
(2) Where any undertaking set-up for the construction of buildings, bridges, roads, canals, dams or
other construction work is closed down on account of the completion of the work within two years from
the date on which the undertaking had been set-up, no workman employed therein shall be entitled to any
compensation under clause (b) of section 25F, but if the construction work is not so completed within two
years, he shall be entitled to notice and compensation under that section for every 1
[completed year of
continuous service] or any part thereof in excess of six months.]
25G. Procedure for retrenchment.—Where any workman in an industrial establishment, who is a
citizen of India, is to be retrenched and he belongs to a particular category of workmen in that
establishment, in the absence of any agreement between the employer and the workman in this behalf, the
employer shall ordinarily retrench the workman who was the last person to be employed in that category,
unless for reasons to be recorded the employer retrenches any other workman.
25H. Re-employment of retrenched workmen.—Where any workmen are retrenched, and the
employer proposes to take into his employ any persons, he shall, in such manner as may be prescribed,
give an opportunity 2
[to the retrenched workmen who are citizens of India to offer themselves for reemployment and such retrenched workman] who offer themselves for re-employment shall have
preference over other persons.
25-I. [Recovery of moneys due from employres under this chapter.] Rep. by the Industrial Disputes
(Amendment and Miscellaneous Provisions) Act, 1956 (36 of 1956), s. 19 (w.e.f. 10-3-1957).
25J. Effect of laws inconsistent with this Chapter.—(1) The provisions of this Chapter shall have
effect notwithstanding anything inconsistent therewith contained in any other law [including standing
orders made under the Industrial Employment (Standing Orders) Act, 1946 (20 of 1946)]:
3
[Provided that where under the provisions of any other Act or rules, orders or notifications issued
thereunder or under any standing orders or under any award, contract of service or otherwise, a workman
is entitled to benefits in respect of any matter which are more favourable to him than those to which he
would be entitled under this Act, the workman shall continue to be entitled to the more favourable
benefits in respect of that matter, notwithstanding that he receives benefits in respect of other matters
under this Act.]
(2) For the removal of doubts, it is hereby declared that nothing contained in this Chapter shall be
deemed to affect the provisions of any other law for the time being in force in any State in so far as that
law provides for the settlement of industrial disputes, but the rights and liabilities of employers and
workmen in so far as they relate to lay-off and retrenchment shall be determined in accordance with the
provisions of this Chapter.]