Question

XYZ Textiles Ltd. terminated four workers for misconduct without paying compensation. Workers' claim for retrenchment compensation was rejected. Under the ID Act, 1947, choose the correct option.

• A. The termination amounts to lay-off; compensation will be awarded.
• B. The termination amounts to retrenchment; compensation will be awarded.
• C. The termination violated the provisions under the ID Act, 1947; compensation will be awarded.
• D. The termination does not amount to retrenchment; hence no compensation.

Hint:

Retrenchment \(\neq\) dismissal for misconduct; compensation is tied to retrenchment, not punitive discharge.

Answer 1

The Correct Option is D

"Retrenchment" under the ID Act expressly excludes termination as a punishment inflicted by way of disciplinary action for misconduct. Where dismissal is on proved misconduct after due enquiry, it is not retrenchment and statutory retrenchment compensation is not attracted. A "lay-off" is a temporary failure or refusal to provide employment; that clearly does not match deliberate dismissal. Hence, option (4) correctly captures the position.