Section 30A Industrial Disputes Act 1947 - Penalty for Closure Without Notice
Section 30A of the Industrial Disputes Act, 1947 prescribed punishment where an employer closed an undertaking without complying with the notice requirement under Section 25FFA. The present framework for closure is contained in the Industrial Relations Code, 2020.
Section 30A of the Industrial Disputes Act 1947
Section 30A - Penalty for closure without notice
Any employer who closes down any undertaking without complying with the provisions of Section 25FFA shall be punishable with imprisonment for a term which may extend to six months, or with fine which may extend to five thousand rupees, or with both.
Section 74 - Sixty Days' Notice of Intended Closure
Section 74 requires an employer intending to close an undertaking to serve notice on the appropriate Government at least sixty days before the intended closure becomes effective. The notice must be given in the prescribed manner and must clearly state the reasons for the intended closure.
The statutory notice requirement does not apply to an industrial establishment in which fewer than fifty workers are employed or were employed on any day during the preceding twelve months, or to an industrial establishment set up for construction of buildings, bridges, roads, canals, dams or other construction work or projects.
The appropriate Government may also exempt an undertaking from the notice requirement for a specified period where exceptional circumstances such as an accident, death of the employer, natural calamity or a similar extraordinary situation justify such action.
Penalty for Contravention of Section 74
Section 74 is not separately listed in Sections 86(1) to 86(19). Accordingly, a contravention of Section 74 falls within the residual penalty provision in Section 86(20), which applies to contravention of another provision of the Code, or rules or regulations under it, not otherwise covered by the preceding penalty provisions.
Section 86(20)
The residual penalty may extend to Rs. 1,00,000 for contravention of a provision of the Code not covered by Sections 86(1) to 86(19), or of rules or regulations framed under the Code.
Section 75 - Compensation to Workers on Closure
Where an undertaking is closed for any reason, a worker who has been in continuous service for at least one year immediately before closure is generally entitled to notice and compensation in accordance with Section 70 as if the worker had been retrenched, subject to Section 75 and its exceptions.
Where closure is due to unavoidable circumstances beyond the employer's control, the statutory limit on compensation specified in Section 75 applies. The Code also identifies circumstances that are not, merely by themselves, treated as unavoidable circumstances beyond the employer's control.
Section 80 - Prior Permission for Certain Industrial Establishments
Section 80 applies to industrial establishments covered by Chapter X. An employer intending to close an undertaking of such an establishment must apply, electronically or otherwise in the prescribed manner, for prior permission of the appropriate Government at least ninety days before the intended closure. A copy of the application must simultaneously be served on representatives of the workers in the prescribed manner.
Contravention of Section 80 attracts Section 86(1), which prescribes a fine of not less than Rs. 1,00,000 and up to Rs. 10,00,000. A second or subsequent offence after conviction is governed by Section 86(2), which provides enhanced punishment.
Closure Notice and Permission - Key Distinction
| Provision | Requirement | Relevant penalty |
|---|---|---|
| Section 74 | Generally, sixty days' notice to the appropriate Government before intended closure, subject to statutory exceptions | Residual penalty under Section 86(20), up to Rs. 1,00,000 |
| Section 80 | Prior permission at least ninety days before closure for an industrial establishment to which Chapter X applies | Section 86(1): Rs. 1,00,000 to Rs. 10,00,000; enhanced punishment for repeat offence under Section 86(2) |
| Section 75 | Notice and compensation to eligible workers when an undertaking closes, subject to statutory provisions | Section 86(3): Rs. 50,000 to Rs. 2,00,000; enhanced punishment for repeat offence under Section 86(4) |
State Amendments Under the Earlier Industrial Disputes Act
The earlier statutory material also records State-specific provisions numbered Section 30A. Their subject matter was not identical in every State and should be considered in the historical State-law context in which they were enacted.
Gujarat
Gujarat Act No. 21 of 1972 inserted a State Section 30A concerning an employer's failure to nominate representatives for appointment as members of the Council within the prescribed time. The provision prescribed a fine up to Rs. 50 and an additional fine up to Rs. 50 for every day of continuing failure.
Rajasthan
Rajasthan Act No. 14 of 1970 inserted a State Section 30A concerning contravention of an order issued by the State Government under Section 10K. The provision prescribed imprisonment up to one year, or fine up to Rs. 2,000, or both.
West Bengal
West Bengal Act No. 8 of 1971 inserted a Section 30A concerning closure of an undertaking without compliance with Section 25FFA. It prescribed imprisonment up to six months and fine up to Rs. 5,000.
Repeal and Saving
Section 104 of the Industrial Relations Code, 2020 contains repeal and saving provisions concerning the Industrial Disputes Act, 1947, the Trade Unions Act, 1926 and the Industrial Employment (Standing Orders) Act, 1946. The date of closure, applicable State law, proceedings already initiated and the saving provisions may therefore be material in an individual case.
This page provides general statutory information. Closure obligations depend on the nature and size of the establishment, the appropriate Government, applicable rules and notifications, the date of the proposed closure, and any State-specific legal provisions.