Judicial Construction of Application of Chapter VA of the Industrial Disputes Act, 1947

Abstract

The Industrial Disputes Act as it stood in 1947 had no provision for payment of 'lay-off' and 'retrenchment' compensation in case workmen were laid off or retrenched in case of certain contingencies. Though some progressive employers used to voluntarily pay and Industrial Tribunals and courts used to award such compensation at times, the situation was far from satisfactory. This situation was addressed in 1953 when as a consequence of accumulated stocks in textile industry, textile mills were threatened with the effect of closure of one or more shifts entailing lay-off or retrenchment of a large number of workers employed in the industry. Thus, to avoid industrial unrest in the country, the President of India promulgated the Industrial Disputes (Amendment) Ordinance, 1953. As a result, Chapter VA containing Sections 25A to 25J was inserted by Act No. 43 of 1953 with effect from this Chapter relates to 'Lay-off and Retrenchment'. The researcher believes that this Chapter is extremely important to the working of any industry because it is the workmen who make the industry function and if they are dissatisfied or removed then it will hamper the working of the industry. The researcher in this research paper will be dealing with the issues regarding the applicability of this Chapter VA as interpreted by courts.