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Section 2 (00) deals with the definition of the term Retrenchment. Retrenchment means the termination where the employer of the service of the workman, for any reason whatsoever, otherwise than as a punishment inflicted by way of disciplinary action, but does not include:
a. Termination by the way of punishment inflicted pursuant to disciplinary action.
b. Voluntary Retirement of the workman.
c. Retrenchment of the workman of the reaching the age of superannuation if the contract of employment between the employer and the workman contains stipulation in that behalf: or
d. Termination of the service of a workman on the ground of continued ill health.

The definition expressly provides that the following cannot amount to retrenchment: -
a. Termination of services as a punishment inflicted by way of disciplinary action.
b. Voluntary Retirement of the workman.
c. Retirement of the workman on reaching the age of superannuation, if the contract of the employment contains a stipulation on that behalf,
d. Termination of a workman's services on the ground of ill health.

It does not matter why the employer discharges the surplus, if the other requirements of the definition are fulfilled. In many cases the Courts have held that the employer is justified in retrenching "the dead weight of uneconomic surplus" provided that the employer acts bonafide and not for the purpose of victimization of his employees.

The power of retrenchment is to be used reasonably only for the purpose of rationalization of surplus and uneconomic labour. It should be noted that even a temporary worker can claim retrenchment compensation if he is retrenched.

In the State Bank of India versus N. Sundaramony, the courts held that as the definition of "retrenchment" includes termination of service "for any reason whatsoever ", the Bank's contention that the termination was not retrenchment but ordinary termination of the temporary services, is not sustainable.

Retrenchment, without a reason, is no retrenchment, but once the conditions contained in the definition are satisfied, it does not matter why the employer chose to discharge the surplus.

General Provisions- Retrenchment:
No workman employed in an industry, who has been in a continuous service for not less than one year under an employer be retrenchment by the employer until:
a. The workman has been given one month's written notice, indicating the reasons for retrenchment and the period of notice has expired, or:
b. The workman has been paid, in lieu of such notice, wages for the period of notice:

Such notice is not necessary if the retrenchment is under an agreement, which specifies a date for the termination of service. It should be noted that a workman is entitled to the protection only if he is employed in h industry and if he has been in continuous service for not less than one year under the employer.

Procedure for Retrenchment:
The maxim of "last come, first go" relates to the procedure governing retrenchment. The need to observe this principle is the rule, while a departure from the same is the exception. The principle applies only when:
1. The employee is a workman in an industrial establishment.
2. He is a citizen of India
3. He is to be retrenched
4. He belongs to a particular category of workmen in that establishment and
5. There is no agreement between the employer and the workman providing for any arrangement to the contrary.

If the employer retrenches any workman he has to record reasons for the same. In a celebrated case, it was held that reasons such a inefficiency, habitual irregularity in the discharge of duties, and untrustworthiness are sufficient and valid reasons to deviate from the rule of "last come, first go". This principle has been incorporated as a devise to ensure that under the guise of retrenchment, workmen are not victimized or otherwise discriminated against.

In exceptional cases, the employer can depart from this rule. The burden is upon the employer to conclusively justify such departure by means of reliable evidence. An unjustified departure from the rule entitles the workman to reinstament.

Re - employment of Retrenched Workman:
The law provides that where any workmen are retrenched, and the employer proposes to take into his employment any persons, he shall, in such manner as may be prescribed, give an opportunity to the retrenched workmen who are citizens of India to offer themselves for re - employment, and such retrenched workmen who offer themselves for re - employment shall have precedence over other persons. The above provisions admit of no exception once the qualifications specified therein are satisfied.

There has been a conflict of decisions of the various High Courts as to whether the expression "re - employment" contemplates re - employment on the previous or same terms and conditions.

Sandeep Shenoy,
Advocate,
Mysore.