Section 25K of IDA : Section 25K: Application Of Chapter Vb

Explanation using Example

Imagine a manufacturing company, XYZ Pvt. Ltd., located in Karnataka, which employs 150 workers. The company operates throughout the year without any seasonality in production. Suddenly, economic circumstances force the company to consider laying off some workers. Before doing so, the management reviews the applicable laws.

Under the Industrial Disputes Act, 1947, specifically Section 25K, XYZ Pvt. Ltd. must adhere to the regulations outlined in Chapter VB because they employ more than 100 workers on average per working day over the past twelve months.

However, in Andhra Pradesh, if XYZ Pvt. Ltd. were operating there with the same number of employees, the company would not be subject to Chapter VB's regulations, as the state amendment requires a minimum of 300 workers for the provisions to apply, unless the State Government decides to lower the threshold for specific reasons.

In this scenario, XYZ Pvt. Ltd. must follow the procedures laid out in Chapter VB for any layoffs or retrenchments, including seeking prior permission from the appropriate government authority, due to the number of employees and the non-seasonal nature of their work.