Section 80: Procedure for closing down an industrial establishment

Finin2min analysis — what the section actually does

Full statutory text — Section 80

80. Procedure for closing down an industrial establishment.—(1) An employer who intends to
close down an undertaking of an industrial establishment to which this Chapter applies shall,
electronically or otherwise, apply in such manner as may be prescribed, for prior permission at least
ninety days before the date on which the intended closure is to become effective, to the appropriate
Government, stating clearly the reasons for the intended closure of the undertaking and a copy of such
application shall also be served simultaneously on the representatives of the workers in such manner as
may be prescribed:
   Provided that nothing in this sub-section shall apply to an undertaking set up for the construction of
buildings, bridges, roads, canals, dams or for other construction work.
    (2) Where an application for permission has been made under sub-section (1), 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 and the persons interested in such closure may, having regard
to the genuineness and adequacy of the reasons stated by the employer, the interests of the general
public 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.
    (3) Where an application 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 as applied for 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.
    (4) An order of the appropriate Government granting or refusing to grant permission shall, subject
to the provisions of sub-section (5), be final and binding on all the parties and shall remain in force for
one year from the date of such order.
   (5) 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 (2)
within the prescribed time from the date on which such order is made or refer the matter 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.

    (6) Where no application for permission under sub-section (1) is made within the period specified
therein, or where the permission for closure has been refused, the closure of the undertaking shall be
deemed to be illegal from the date of closure and the workers shall be entitled to all the benefits under
any law for the time being in force as if the undertaking had not been closed down.
   (7) 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
undertaking 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 undertaking for such period as may be
specified in the order.
    (8) Where an undertaking is permitted to be closed down under sub-section (2) or where permission
for closure is deemed to be granted under sub-section (3), every worker who is employed in that
undertaking immediately before the date of application for permission under this section, shall be
entitled to receive 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) An employer who intends to close down an undertaking of an industrial establishment to which this Chapter applies shall, electronically or otherwise, apply in such manner as may be prescribed, for prior permission at least ninety days before the date on which the intended closure is to become effective, to the appropriate Government, stating clearly the reasons for the intended closure of the undertaking and…
2. Additional operative limb — Provided that nothing in this sub-section shall apply to an undertaking set up for the construction of buildings, bridges, roads, canals, dams or for other construction work.
3. Qualification / exception to test — Provided that nothing in this sub-section shall apply to an undertaking set up for the construction of buildings, bridges, roads, canals, dams or for other construction work.
4. Numerical or timing control — Procedure for closing down an industrial establishment.—(1) An employer who intends to close down an undertaking of an industrial establishment to which this Chapter applies shall, electronically or otherwise, apply in such manner as may be prescribed, for prior permission at least ninety days before the date on which the intended closure is to become…
5. Central Rule mapping — 35, 36. 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 80

Source & verification trail