Section 79: Conditions precedent to retrenchment of workers to which Chapter X applies

Finin2min analysis — what the section actually does

Full statutory text — Section 79

79. Conditions precedent to retrenchment of workers to which Chapter X applies.—(1) No
worker employed in any industrial establishment to which this Chapter applies, who has been in
continuous service for not less than one year under an employer shall be retrenched by that employer
until,— (a) the worker has been given three month’s notice in writing indicating the reasons for retrenchment and the period of notice has expired, or the worker has been paid in lieu of such notice, wages for the period of the notice; and (b) the prior permission of the appropriate Government has been obtained on an application made in this behalf. (2) An application for permission under sub-section (1) shall be made by the employer electronically
or otherwise in the prescribed manner stating clearly the reasons for the intended retrenchment and a
copy of such application shall also be served simultaneously on the workers concerned in such manner
as may be prescribed. (3) Where an application for permission under sub-section (1) has been made, the appropriate
Government, after making such enquiry as it thinks fit and after giving a reasonable opportunity of
being heard to the employer, the workers concerned and the persons interested in such retrenchment,
may, having regard to the genuineness and adequacy of the reasons stated by the employer, the interests
of the workers and all other relevant factors, by order and for reasons to be recorded in writing, grant
or refuse to grant such permission and a copy of such order shall be communicated to the employer and
the workers. (4) Where an application for permission has been made under sub-section (1) and the appropriate
Government does not communicate the order granting or refusing to grant permission to the employer
within a period of sixty days from the date on which such application is made, the permission applied
for shall be deemed to have been granted on the expiration of the said period of sixty days and the
application shall be deemed to have been disposed of accordingly by the appropriate Government. (5) An order of the appropriate Government granting or refusing to grant permission shall, subject
to the provisions of sub-section (6), be final and binding on all the parties concerned and shall remain
in force for one year from the date of such order. (6) The appropriate Government may, either on its own motion or on the application made by the
employer or any worker, review its order granting or refusing to grant permission under sub-section (3)
within the prescribed time from the date on which such order is made or refer the matter or, as the case
may be, cause it to be referred to a Tribunal for adjudication: Provided that where a reference has been made to a Tribunal under this sub-section, it shall pass an
award within a period of thirty days from the date of such reference. (7) Where no application for permission under sub-section (1) is made, or where the permission for
any retrenchment has been refused, such retrenchment shall be deemed to be illegal from the date on which the notice of retrenchment was given to the worker and the worker shall be entitled to all the
benefits under any law for the time being in force as if no notice had been given to him. (8) Notwithstanding anything contained in the foregoing provisions of this section, the appropriate
Government may, if it is satisfied that owing to such exceptional circumstances as accident in the
establishment or death of the employer or the like, it is necessary so to do, by order, direct that the
provisions of sub-section (1) shall not apply in relation to such establishment for such period as may be
specified in the order. (9) Where permission for retrenchment has been granted under sub-section (3) or where permission
for retrenchment is deemed to be granted under sub-section (4), every worker who is employed in that
establishment immediately before the date of application for permission under this section shall be
entitled to receive, at the time of retrenchment, compensation which shall be equivalent to fifteen days
average pay, or average pay of such days as may be notified by the appropriate Government, for every
completed year of continuous service or any part thereof, in excess of six months.

How to apply this provision

1. Primary statutory test — (1) No worker employed in any industrial establishment to which this Chapter applies, who has been in continuous service for not less than one year under an employer shall be retrenched by that employer until,— (a) the worker has been given three month’s notice in writing indicating the reasons for retrenchment and the period of notice has expired, or the worker has been paid in lieu of such notice, wages for the…
2. Additional operative limb — (2) An application for permission under sub-section (1) shall be made by the employer electronically or otherwise in the prescribed manner stating clearly the reasons for the intended retrenchment and a copy of such application shall also be served simultaneously on the workers concerned in such manner as may be prescribed.
3. Qualification / exception to test — Provided that where a reference has been made to a Tribunal under this sub-section, it shall pass an award within a period of thirty days from the date of such reference.
4. Numerical or timing control — Conditions precedent to retrenchment of workers to which Chapter X applies.—(1) No worker employed in any industrial establishment to which this Chapter applies, who has been in continuous service for not less than one year under an employer shall be retrenched by that employer until,— (a) the worker has been given three month’s notice in writing…
5. Central Rule mapping — 33, 34. Read the mapped provision together with this text rather than treating the concordance as a substitute for it.
6. Evidence file — retain facts and records proving the role/status of: Employer, Worker, Appropriate Government, Tribunal.

Rules, forms and cross-references

A direct concordance is not exhaustive. Central/State jurisdiction, schemes, authority appointments, saved instruments and later notifications may change the practical route without changing the section wording.

Worked example

Q&A — Section 79

Source & verification trail