Section 25M of Industrial Disputes Act 1947 - Prohibition of Lay-off

Section 25M formed part of Chapter V-B of the Industrial Disputes Act, 1947 and imposed a prior-permission regime for laying off specified workmen in industrial establishments to which that Chapter applied. It also prescribed exceptions, application procedure, hearing requirements, deemed permission, review or adjudication, consequences of non-compliance and rules concerning alternative employment.

Historical legal scope: This article explains Section 25M under the legal position applicable before the Bharatiya Sakshya Adhiniyam, 2023 came into force on 1 July 2024. The Bharatiya Sakshya Adhiniyam concerns evidence law and did not itself amend Section 25M. State amendments, rules and notifications applicable to the establishment and relevant date should also be checked.

What is Section 25M?

Section 25M was titled "Prohibition of lay-off." Its principal rule applied to workmen, other than badli workmen and casual workmen, whose names were borne on the muster rolls of an industrial establishment to which Chapter V-B applied.

Section 25M(1) - Prior permission before lay-off

An employer could not lay off a covered workman without prior permission of the appropriate Government or an authority specified by that Government through an Official Gazette notification.

The Central provision created exceptions where the lay-off was due to shortage of power or natural calamity. In the case of a mine, the specified exceptional causes also included fire, flood, excess of inflammable gas or explosion.

Meaning of lay-off

The general definition of "lay-off" was contained in Section 2(kkk) of the Industrial Disputes Act. In substance, it concerned an employer's failure, refusal or inability to give employment to a workman whose name was on the muster rolls because of specified causes, subject to the complete statutory definition and its conditions. Section 25M added the special Chapter V-B permission requirements for establishments within its scope.

Badli and casual workmen

Section 25M(1) expressly excluded a badli workman and a casual workman from the prior-permission protection stated in that sub-section. The applicability of other statutory rights had to be determined separately under the relevant provisions.

Section 25M(2) - Application and notice to workmen

The employer's application for permission had to be made in the prescribed manner and clearly state the reasons for the intended lay-off. A copy of the application had to be served simultaneously on the workmen concerned in the prescribed manner.

Section 25M(3) - Mine lay-offs and application within 30 days

Where covered workmen in a mine had been laid off for reasons of fire, flood, excess of inflammable gas or explosion, the employer was required to apply in the prescribed manner for permission to continue the lay-off within 30 days from commencement of the lay-off.

Section 25M(4) - Enquiry and decision

After an application under sub-section (1) or (3), the appropriate Government or specified authority could conduct such enquiry as it considered fit. It was required to give a reasonable opportunity of being heard to the employer, the workmen concerned and persons interested in the lay-off.

In deciding whether to grant or refuse permission, the authority was to have regard to the genuineness and adequacy of the reasons, the interests of the workmen and all other relevant factors. Reasons for the decision had to be recorded in writing and the order communicated to the employer and workmen.

Section 25M(5) - Deemed permission after 60 days

If the Government or specified authority did not communicate an order granting or refusing permission within 60 days from the date of the application under sub-section (1) or (3), the permission applied for was deemed to have been granted on expiry of that period.

Section 25M(6) - Duration and binding effect of order

Subject to the review and reference power in sub-section (7), an order granting or refusing permission was final and binding on the parties concerned and remained in force for one year from its date.

Section 25M(7) - Review or reference to Tribunal

The appropriate Government or specified authority could review its order on its own motion or on an application by the employer or any workman. It could instead refer, or cause the matter to be referred, to a Tribunal for adjudication. Where such a reference was made, the statutory proviso required the Tribunal to pass its award within 30 days from the date of reference.

Section 25M(8) - Consequences of an illegal lay-off

A lay-off was deemed illegal from the date on which the workmen were laid off where the required application under sub-section (1) was not made, the application under sub-section (3) was not made within the prescribed period, or permission for the lay-off was refused. The workmen were then entitled to all benefits under the law for the time being in force as if they had not been laid off.

Section 25M(9) - Exceptional circumstances

The appropriate Government could, despite the preceding provisions, direct that sub-section (1) or sub-section (3) would not apply to an establishment for a specified period where exceptional circumstances made such a direction necessary. The statutory examples included an accident in the establishment or death of the employer.

Section 25M(10) - Application of Section 25C

Section 25M(10) applied the provisions of Section 25C, other than its second proviso, to cases of lay-off referred to in Section 25M. Section 25C dealt with the right of qualifying workmen to compensation for lay-off, subject to its statutory conditions.

Alternative employment - Explanation to Section 25M

For Section 25M, a workman was not deemed to be laid off if the employer offered qualifying alternative employment. The statutory explanation required, among other things, that the alternative work did not call for special skill or previous experience and could be performed by the workman; that it was in the same establishment or another establishment of the same employer in the same town or village, or within a distance that did not involve undue hardship; and that the wages normally payable to the workman were also offered for the alternative appointment.

Relationship with Sections 25K and 25L

Section 25K governed application of Chapter V-B, including the Central employment threshold and exclusions for seasonal or intermittent establishments. Section 25L supplied Chapter V-B definitions, including "industrial establishment" and a special rule concerning the appropriate Government.

Rajasthan State amendment

The source page records Rajasthan Act No. 8 of 1984 making State-specific changes to Section 25M. These included references to the State Government and to establishments brought within Chapter V-B under the Rajasthan amendment to Section 25K, together with a modified permission procedure.

Under the amendment reproduced in the source, the employer was required to state clearly the reasons for intending to lay off or continue the lay-off and serve a copy of the application on the affected workman by registered post with acknowledgement due. The authority, after enquiry and reasonable opportunity of hearing, was to consider the genuineness and adequacy of the reasons, terms of the contract of service and standing orders, record reasons in writing and communicate its order.

The Rajasthan text also provided for review by the specified authority or reference to the Labour Court having jurisdiction, with an award to be passed within 30 days where a reference was made. It also renumbered specified sub-sections. The precise State provision, amendments and notifications applicable on the relevant date should be verified before reliance.

Practical checklist under Section 25M

Confirm that Chapter V-B applied to the industrial establishment under Section 25K and any applicable State amendment.
Confirm that the affected person was a covered workman on the muster rolls and was not excluded as a badli or casual workman for Section 25M(1).
Identify the reason for the proposed lay-off and whether a statutory exception applied.
Where prior permission was required, make the prescribed application stating the reasons and simultaneously serve the workmen concerned.
For a qualifying mine emergency, check the 30-day application requirement for continuation of the lay-off.
Track the 60-day period relevant to deemed permission.
Check the written order, its one-year operation and any review or Tribunal reference.
If permission was not sought when required, was sought late under sub-section (3), or was refused, consider the consequences under sub-section (8).
Check whether qualifying alternative employment was offered under the Explanation.
Verify applicable State amendments, rules, notifications and prescribed forms.

Related Chapter V-B provisions

Section 25N dealt with conditions precedent to retrenchment, while Section 25O dealt with closure. Section 25Q contained the related penalty provision for lay-off and retrenchment without previous permission.

Official legal resources

Authoritative Central legislation can be checked through the India Code portal. Labour legislation, rules and notifications can also be checked through the Ministry of Labour and Employment. State amendments and notifications should be verified from the competent State Government or State Gazette source.