Retrenchment
(Redundancy)
Section 48 IDA definition.
“Termination y an employer of the services of a
workman on the ground that such workman is in excess of the no of workmen
required by such employer to carry on his industry.”
Part IV B – Section 31E – 31H – deals with RT.
RI is also governed by Termination of Employment
of workmen (Sp. Prov) Act -1971.
Therefore RT is involuntary loss of job without
fault on the part of the employee.
Characteristics of RT;
a.
Termination by employer for the fault of the employee.
b.
Surplus labour.
c.
Continuance of the industry.
RT and Closure.
Photo Cinex v Rajah
·
Distinction was discussed.
·
In this case what the employer intended was a
“phase closure” (closure arranged in stages) and not a RT.
·
Held – IDA provisions of RT does not apply to an
employer who terminates the services of a workman to effect a phased closure of
a business section or a section of the establishment.
·
Also held that when the employers business
consists of more than one activity /section and closing one of them is not RT.
·
Therefore closure of a whole business = not RT
as one of the requirements of RT is that employer need to carry on the industry
after termination of the employee.
RT and Lay off
·
Lay off is a temporary RT due to factors such as
breakdown of machinery, shortage of raw material etc.
·
Character of the layoff is that the displaced
employees will be restored to their jobs when conditions return to normal.
-
Exceptions.
RT provisions in IDA do not apply to;
a.
Employer who has employed less than 15
employees.
b.
To any industry which is of a seasonal character
or where work is performed intermittently (on and off).
c.
To the RT of any employee who has been employed
for less than 1year.
Legal Procedure of RT.
According to IDA where an employer intend to RT (unless the
RT is not a result of a collective agreement then this procedure has no
application). Must;
a.
Give the employee at least 1 month notice in
writing of such intention of RT.
b.
Send a copy of that notice to the Com. of Labor
and to the TU id that employee is a member of a TU.
c.
Should send the employee a further notice of
1months notice. Therefore in total cannot retrench unless 2 months passed from
the date of notice,
·
If this RT is referred for settlement by
arbitration or conciliation or to IC the employers right to RT is suspended for
another 2months from that date of such reference and within that 2months IC or
arbitrator will have to make a decision.
·
Prior to TEWA 1971 amended by 1976 Act, employer
had the right to terminate the services of an employee in situations where he
no longer required them.
·
All employer had to do was to give notice or
grant payment in lieu of that notice.
·
This right was restricted by IDA.
·
But IDA only prescribed the procedure of RT.
·
Further restricted by TEWA but did not take away
employers right to RT completely.
·
Section 2(1) of TEWA prohibits the termination
of any employee without.
a.
Prior written consent of that employee.
b.
Prior written approval of the commission of
labour.
Meaning of “termination”.
Section 2(4) covers terminations.
a.
For any reason other than by reason of
punishment imposed by way of a disciplinary action. [Therefore act does not
cover disciplinary terminations].
St. Anthony’s Hardware v Kumar
Incompetency and inefficiency is not equal to misconduct and
punishment by way of disciplinary can only be given for misconduct within IDA.
b.
Non-employment temporarily or permanently.
c.
Non –employment due to closure of trade/
industry (this was included by the 1976 Amendment).
Act has no application
a.
If element ceases by operation of law; CMU v De
Mel.
b.
Fixed term contracts.