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Industrial Disputes Act, 1947 · Chapter VA: Lay-Off and Retrenchment

Section 25G: Procedure for retrenchment

The Industrial Disputes Act, 1947 was repealed and replaced by the Industrial Relations Code, 2020 from 21 November 2025. It still applies to matters and proceedings from before that date, as the repealing law provides.

In plain words

When retrenching workmen of a particular category, the employer should ordinarily retrench the last person employed in that category first. This is the rule of last come, first go.

  • The employer can depart from this by agreement or for reasons recorded in writing.

A simplified explanation, prepared with AI assistance from the official text below and checked automatically against it for numbers and cross-references. The official text is the law and prevails over this summary. Not legal advice.

Read the in-depth explanation, with key Supreme Court rulings ↓

Official text

Where any workman in an industrial establishment, who is a citizen of India, is to be retrenched and he belongs to a particular category of workmen in that establishment, in the absence of any agreement between the employer and the workman in this behalf, the employer shall ordinarily retrench the workman who was the last person to be employed in that category, unless for reasons to be recorded the employer retrenches any other workman.

Source: India Code (Legislative Department), the text of the Act as it stood before its repeal. Words in square brackets [ ] were inserted or substituted by later amending Acts, and *** marks words omitted by an amendment. The amendment footnotes are not reproduced here. Official text on India Code.

Understanding this section

Section 25G sets the rule of last come, first go. When a workman in a category is to be retrenched, the employer should ordinarily retrench the last person employed in that category, unless there is an agreement otherwise or the employer records reasons for departing from the rule.

Scope

The rule works within a category of workmen in the establishment, so the seniority list must be drawn up category by category. An employer can depart from it only for recorded reasons. Unlike section 25F, section 25G is not limited to workmen with one year of continuous service.

Retaining juniors while retrenching a senior is the usual breach. It can make the retrenchment illegal even if notice and compensation under section 25F were given.

Key Supreme Court rulings

Common mistakes

  • Comparing seniority across different categories of workmen.
  • Treating compliance with section 25F as a complete answer to a claim under section 25G.

Read with: Section 25F Industrial Disputes Act, 1947, Section 25H Industrial Disputes Act, 1947

Prepared with AI assistance as a study aid. Every ruling listed was checked against the Supreme Court's own judgments on this site, and quoted words appear in those judgments; linked names open the full judgment. Read the judgments themselves before relying on them. Not legal advice.

Supreme Court judgments citing the section 25G