Background
Lay-off, retrenchment, and closure under the Industrial Relations Code, 2020, as operationalized through the Industrial Relation (Gujarat) Rules, 2021, establish a structured process for managing workforce reductions in industrial establishments. The framework ensures fairness by prescribing notice requirements, compensation norms, and prior approvals where applicable. These provisions aim to balance managerial flexibility with worker protection, promoting orderly handling of employment changes and minimizing industrial disputes
Applicability
The provisions of this Chapter shall apply to an industrial establishment (not being an establishment of a seasonal character or in which work is performed only intermittently) in which not less than three hundred workers, or such higher number of workers as may be notified by the appropriate Government, were employed on an average per working day in the preceding twelve months.
Industrial establishment means—
(i) a factory as defined in clause (m) of section 2 of the Factories Act, 1948;
(ii) a mine as defined in clause (j) of sub-section (1) of section 2 of the Mines Act, 1952; or
(iii) a plantation as defined in clause (f) of section 2 of the Plantations Labour Act, 1951.
Compliance Requirements under the Rules In accordance with the Code
1. Prohibition of lay-off in Gujarat (Section 78)
Workers on the muster rolls (except badli or casual workers) of an industrial establishment cannot be laid off without prior government permission, except in cases of fire, flood, excess inflammable gas, or explosion in a mine, shortage of power or natural calamity.
1) Applicable on Est. employing 300 or more workmen on an avg. per working day for preceding 12 months & engaged in industries which are not seasonal /with intermittent work
2) Application for permission shall be made by employer in prescribed manner stating clearly reasons for lay-off & copy of such application shall also be served on workmen concerned
3) Where workmen (other than badli or casual) of an industrial establishment, being a mine, have been laid-off for reasons of fire, flood or excess of inflammable gas or explosion, employer, shall, within a period of 30 days from date of commencement, of lay-off, apply to appropriate Government/specified authority for permission to continue lay-off
4) Provisions of Section 67(other than second proviso thereto) shall apply to cases of lay-off referred to here
5) Worker will not be deemed to be laid off if he has been offered alternate employment in same establishment or other estab. and transfer will not involve undue hardship
2. Form IX: Application for permission of lay-off & serving copy of such application to workers (Section 78(2), Rule-29)
The employer shall apply for permission under section 78(1) in FORM-IX, stating reasons for the proposed lay-off. A copy must be sent to the concerned worker by registered/speed post and electronically, and also displayed prominently on the notice board or electronic board at the main entrance.
An application for permission for lay-off of any workman in an Industrial Est employing 300 or more workmen on an average per working day for preceding12 months and engaged in industries which are not seasonal /with intermittent work shall be made by the employer in Form- IX stating reasons for the proposed lay-off. A copy must be sent to the concerned worker by registered/speed post and electronically, and also displayed prominently on the notice board or electronic board at the main entrance.
3. Application for permission of retrenchment in Form-IX and Notice of retrenchment in Gujarat (Section 79(2), Rule 31)
The employer must apply for permission of retrenchment in Form-IX stating reasons electronically & send a copy to workers via email and registered/speed post, and display it on the notice board or electronic board at the main entrance of the industrial establishment.
An application for retrenchment permission as referred to in sub-section (1) of section 79 of any workman in an Industrial Est employing 300 or more workmen on an average per working day for preceding12 months and engaged in industries which are not seasonal /with intermittent work ) shall be made by the employer in FORM- IX stating clearly therein the reasons for the intended retrenchment electronically and a copy of such application shall also be sent to workers electronically and by registered post or speed post. Such application shall also be displayed conspicuously by the employer on a notice board or on electronic board at the main entrance to the industrial establishment
4. Conditions precedent to retrenchment of workmen in Gujarat (Section 79)
No worker employed in industrial establishment employing 300 or more workers (est. not of seasonal nature/intermittent work), who has been in continuous service for not less than a year shall be retrenched by employer unless he has been given 3 month’s notice in writing with reason for retrenchment
Applicable on Est. employing 300 or more workmen on an average per working day for preceding12 months & engaged in industries which are not seasonal /with intermittent work
1) If period of notice has expired, worker to be paid, wages in lieu of notice
2) Prior permission of Govt has been obtained for retrenchment
3) Application for permission shall be made by employer stating clearly reasons for retrenchment & copy of application shall also be served on workmen concerned
4) Where no application for permission is made, or where permission has been refused, retrenchment shall be deemed to be illegal from date on which notice of retrenchment was given to workman& workman shall be entitled to all benefits under any law in force as if no notice had been given
5) When retrenchment permission is granted, every workman employed at the time of the application is entitled to 15 days’ average pay for each year of continuous service, including parts exceeding six months.
Penalty & Punishment
U/s86:An employer who contravenes the provisions of section 78 or section 79 or section 80 shall be punishable with fine which shall not be less than one lakh rupees, but which may extend to ten lakh rupees.
For subsequent offence, he shall be punishable with fine which shall not be less than five lakh rupees, but which may extend up to twenty lakh rupees or with imprisonment for a term which may extend to six months, or with both
Disclaimer: The information contained in this Article is intended solely for personal non-commercial use of the user who accepts full responsibility of its use. The information in the article is general in nature and should not be considered to be legal, tax, accounting, consulting or any other professional advice. We make no representation or warranty of any kind, express or implied regarding the accuracy, adequacy, reliability or completeness of any information on our page/article.