—Contributed by Deepak Miglani Legal Buddy

Retrenchment means the termination of the service of a workman by the employer for any reason whatsoever, otherwise than as a punishment inflicted by way of disciplinary action but it does not include the following:-

• Voluntary retirement of the workman,

• Retirement of the workman on reaching the age of superannuation if the contract of employment between the employer and the workman concerned contains a stipulation in that behalf,

• Termination of service of the workman as result of the non-renewal of the contract of employment between the employer and the workman concerned on its expiry or of such contract being terminated under stipulation in that behalf,

• Termination of the service of a workman on the ground of continued ill-health.[1]

The conditions in clauses (a) &(b) of section 25 F of Industrial Disputes Act are categorically imperative and those conditions must be fully complied with before effecting retrenchment or the termination. The sole object of giving a month’s notice in writing or payment of wages for the period of notice in lieu of the notice as well as the compensation determined in accordance with clause (b) is that the workman will not be forced on the street on termination of his service. Such an object would be frustrated if adjustment of the dues is permitted. It is there fore , not permissible for employer to make adjustment of money due from employee towards compensation and wages for period of notice which are two preconditions provided in section 25F(a) & (b) of the Industrial Dispute Act.

[1] Section 2(oo) of the Industrial Dispute Act,1947