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in Labour Law
Asked May 26, 2017

Challenge Retrenchment

  • 1 Answer

I am WORKMAN as per ID act. My company officially announced Retrenchment. My employment terms says that employment can be terminated by any party giving 1 month notice or money in lieu. My company selected my name for retrenchment and have paid all my dues alongwith additional pay for my resignation. But, my Juniors are still in service of the company. I am being removed. Is this correct...? I belong to Oil n gas industry consultancy. All paper and computer work, designing of chemical plants. Hope ID act is applicable. Please advice shud I Sue my employee for not following Last in first out rule. And absolutely giving no reason for my selection for retrenchment despite reminders. Sort of forced resignation.

Answer 1

According to Section 25(G) of the Industrial Disputes Act 1947, the principle of last in first out is to be followed for Retrenchment. There are two exceptions  to this rule; one, if there is a contract between the employer and the employee to the contrary that is stating that the rule of last in first out is not to be followed and second, if the employer provides sufficient reason for deviating from this rule. [1]

In the case of Workmen of Sudder Workshop of Jorehaut Tea Co. Ltd. v. Management of Jorehut Tea Co. Ltd.[2] the principle of last in first out was laid down. It was held that if a junior employee has a special talent or qualification, he can be preferred over a senior employee. However the burden to proof rests with the Management to substantiate the special grounds for departure from this rule. This principle has been reiterated in Mackinon Mackenzie & Company ltd. v  Mackinnon Employees Union.[3] 

Since your contract does not have any such clause you can seek redressal at the appropriate forum. Even with the contractual clause stating that you can be removed at a month’s notice, Section 25(G) still applies to you unless stated otherwise in the Contract. Also since you have already sent reminders and still not gotten a reply, you are eligible to take action in the Industrial Courts.



[2] AIR 1980 SC 1454


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