Retirement in an industrial context refers to the termination of a workman's service upon reaching a pre-determined age of superannuation or after completing a specific length of service, as stipulated in the contract of employment or standing orders. Unlike dismissal, it is a non-disciplinary termination.
Section 25G of Industrial Dispute Act 1947 : Procedure for Retrenchment
Section 25G codifies the principle of "Last Come, First Go." When an employer decides to retrench workmen due to a surplus of labor, they must follow these rules:
The Rule: The employer shall ordinarily retrench the workman who was the last person to be employed in that specific category.
Exceptions: The employer may depart from this rule only for reasons recorded in writing (e.g., exceptional efficiency of a junior or gross inefficiency of a senior).
Category-wise: This rule applies within the same category of workmen in the industrial establishment; a senior in the "clerical" category cannot challenge the retention of a junior in the "technical" category.
Section 25H of Industrial Dispute Act 1947: Re-employment of Retrenched Workmen
Section 25H provides a right of preference to retrenched workmen.
The Rule: Where any workmen are retrenched, and the employer proposes to take into his employ any persons, he shall give an opportunity to the retrenched workmen to offer themselves for re-employment.
Preference: Such retrenched workmen who offer themselves for re-employment shall have preference over other applicants.
Condition: This applies only if the workman is a citizen of India and the new vacancy is for the same category from which they were retrenched.
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