Section 25FFA of the Industrial Disputes Act 1947 - 60 Days Notice Before Closure
Section 25FFA required an employer intending to close down an undertaking to give the appropriate Government at least sixty days' prior notice, in the prescribed manner, clearly stating the reasons for the intended closure, subject to statutory exemptions and the Government's power concerning exceptional circumstances.
What did Section 25FFA require?
An employer who intended to close down an undertaking was required to serve notice on the appropriate Government at least sixty days before the date on which the intended closure was to become effective.
The notice had to be served in the prescribed manner and had to clearly state the reasons for the intended closure.
Key requirements for closure notice
| Requirement | Section 25FFA position |
|---|---|
| Who gives notice? | The employer intending to close down the undertaking. |
| Notice period | At least sixty days before the intended closure becomes effective. |
| Recipient | The appropriate Government. |
| Form | The notice must be served in the prescribed manner. |
| Reasons | The employer must clearly state the reasons for the intended closure. |
Meaning of appropriate Government
Section 2(a) of the Industrial Disputes Act determined whether the Central Government or a State Government was the "appropriate Government" for an industrial dispute. The answer depended on the nature of the industry, undertaking or authority and the categories specifically mentioned in the statutory definition. The correct Government therefore had to be identified before serving a Section 25FFA notice.
Undertakings with fewer than 50 workmen
Section 25FFA did not apply to an undertaking in which fewer than fifty workmen were employed. It also did not apply where fewer than fifty workmen were employed on an average per working day during the preceding twelve months.
Construction undertakings excluded
The section also excluded an undertaking set up for construction work or a construction project of the kind specified in the provision, including construction of buildings, bridges, roads and canals. The statutory wording applicable on the relevant date should be checked when determining whether a particular project falls within this exemption.
Exceptional circumstances under Section 25FFA(2)
Sub-section (2) empowered the appropriate Government, notwithstanding sub-section (1), to direct by order that the sixty-day notice requirement would not apply to an undertaking for the period specified in the order if exceptional circumstances made such a direction necessary.
The statute referred illustratively to circumstances such as an accident in the undertaking or the death of the employer. The power depended on the appropriate Government being satisfied that exceptional circumstances justified the exemption.
Meaning of closure
Section 2(cc) of the Industrial Disputes Act defined "closure" as the permanent closing down of a place of employment or part thereof. This definition distinguishes statutory closure from a temporary stoppage or lay-off.
Section 25FFA and closure compensation
The notice obligation under Section 25FFA should be distinguished from the rights of workmen on closure. Section 25FFF dealt with compensation to workmen in case of closing down of undertakings and linked qualifying closure compensation to the principles governing retrenchment compensation under Section 25F, subject to the terms and exceptions of Section 25FFF.
Section 25FFA and Chapter V-B
Section 25FFA formed part of Chapter V-A. Separate and more stringent requirements applied to certain larger industrial establishments under Chapter V-B, including the statutory provisions governing closure in Section 25-O. The applicable chapter therefore depended on the establishment, workforce and statutory conditions in force on the relevant date.
Notice is different from prior permission
Section 25FFA required prior notice to the appropriate Government; it did not, by itself, create the prior-permission procedure found in the Chapter V-B closure provisions. It is therefore important to identify which closure regime applied to the undertaking before acting on the notice requirement.
Related provisions
Closure questions under the Industrial Disputes Act may require Section 25FFA to be read with the definition of closure in Section 2(cc), retrenchment conditions in Section 25F, compensation on closure under Section 25FFF, and the special provisions of Chapter V-B where applicable.
Official statutory sources
The central text of the Industrial Disputes Act, 1947 can be checked through India Code and the Ministry of Labour and Employment. The Industrial Disputes (Central) Rules, 1957 and applicable State rules should be checked for the prescribed form and manner of notice, together with relevant State amendments and notifications.