Retrenchment under Industrial and Commercial

1. Introduction

It is undeniable right of the management to retain the services of those person sonly who are really useful and terminate the services of those ones who becomes surplus to the requirements of the employer. It is called retrenchment and is to be made bona fide and the workman retrenched has the right of re-employment in preference of others where the employer proposes to take into his employment any person within a period of one year from the date of retrenchment.

2. Relevant Provisions

Following are the relevant provisions of industrial and commercial employment (standing orders) ordinance, 1968 regarding the concerned topic.

Standing order 13,14 and 14-A

3. Meaning of Retrenchment

“Retrenchment means the termination of services of a workman by the employer on the ground of redundancy, i.e, when he becomes surplus to the requirements of the employer."

4. Retrenchment of a workman u/order 13

i. Authority Empowered to Retrench

It is the employer who can retrench the workman.

ii. Rule of Retrenchment

In the retrenchment “Last come first go” rule must be followed where any workman is to be retrenched and he belongs to a particular category of workmen, the employer shall retrench the workmen who is the last person employed in that category.

a. Meaning of Category

Word category means category in an establishment. Whole business concerns if one establishment it will be one unit. Business concern if consisting of various establishments each will be a separate unit and category would means category of that unit.

iii. Essential for retrenchment

It is necessary that the retrenchment order must be made bona fide. The court should not interfere until and unless some positive mala fide is proved regarding injury to employee. The burden of proof is upon party urging mala fide.

5. Re-Employment of Retrenched workmen

The retrenched workmen are entitled to the re-employment where employer proposes to take into his employ any person within a period of one year from the date of such retrenchment and it is incumbent upon the employer to follow the following procedure.

i. Notice to Retrenched workman

The employer shall send a notice by registered post to the retrenched workmen belonging to the category concerned to offer themselves for re-employment and that notice shall be sent to the last known addresses of the retrenched workmen.

ii. Preference over others

The retrenched workmen shall have preference over others and shall be given re-employment on the basis of their inter-se seniority.

6. Re-Employment in case workmen retrenched belongs to seasonal factory

In case of seasonal factory the workman who was retrenched in one season and reports for duty within ten days of the resumption of work in the factory in the immediately following season shall be given preference for employment by the employer.

i. Notice

Sending a notice to the retrenched workman in case of seasonal factory in not obligatory on the employer but he may if he wishes, send a notice by registered post to the last known address of a workman who was retrenched in one season, require him to report on a day specified in the notice, not being earlier than 10 days before resumption of work in such factory.

ii. Report by workman

If such workman reports as required by the employer on a specified day, he shall be given preference for employment and paid full wages from the day he reports.

7. Re-employment of Retrenched workman engaged in constructions Industry

Where any workman is retrenched or discharged by a contractor or employer engaged in the constructions industry due to completion, cessation, discontinuance of work, he shall be given preference for employment in any other similar work undertaken by the contractor or employer within a period of one year from the date of such retrenchment or discharge.

i. Where workman Re-employed within one month of Retrenchment

Where a workman is re-employed within one month of his retrenchment or discharge he shall be deemed to have been in continuous service of the contractor or employer but no wages shall be paid to him for the period of interruption.

8. Conclusion

To conclude, I can say that, the retrenchment is not to be understood in the same sense as the termination of services of workman on the complete closure of business. Retrenchment implies a continuous running of the business when the services of only some of the workmen who become surplus to the requirements of the employer, are terminated. It shall be incumbent upon the management to retrench only that workman who is the last person employed in that category where the retrenchment has become necessary and it is the right of the retrenched workmen to be given preference over the others if the vacancy occurs in the same category within a period of one year from the date of retrenchment.

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