ELCINA supports changes in Sec 25FFF of Industrial Disputes Act, suggests some modifications


The objective of this proposal is to improve industrial relations, while ensuring the welfare and continuity of employment of workers, which will provide them economic stability

The National Manufacturing Policy formulated recently by the Government of India has suggested certain action points to all the concerned ministries and departments, including the Ministry of Labour and Employment, to ensure early implementation. One of the actionable points for the Labour Ministry is to include the manufacturing sector under the provisions of Section 25FFF of the Industrial Disputes Act, 1947, in addition to the mining sector which currently is already under its ambit. This would require a formal amendment to the Act.

The objective of this proposal is to improve industrial relations, reduce or eliminate disputes and litigation, and ensure the welfare and continued employment of workers, which would provide them economic stability. However, in a capitalist economy, such an effort can also have undesirable consequences.

On the one hand, ELCINA Electronic Industries Association of India, the association dedicated to promoting an electronics manufacturing culture in the country, welcomes the proposed inclusion of manufacturing units set up in national manufacturing and investment zones (NMIZ) under the provisions of Section 25FFF (1A) of the Industrial Disputes Act, 1947. Yet, the association believes that under the National Manufacturing Policy, efforts should be made to arrive at a model for alternative employment opportunities for workers so that they can move from sectors and companies in which there is a low demand for labour to high demand sectors seamlessly, reducing industrial and social tensions. “This would be efficient for both the nation and the industry by lowering costs and raising efficiencies. This would also work as a social security and insurance model for workers,” says Rajoo Goel, secretary general, ELCINA.


ELCINA has also suggested that there should be a provision through insurance schemes for part payment of wages to workers during layoffs. ELCINA also recommends using that period for training them to enhance skills and enable them to tide over periods of unemployment.

Earlier, FICCI had suggested that in the proposed new Section 25FFF (1C) sub-clause (a), the words ‘same zone’ should be replaced with ‘same zone or any other such zone or manufacturing unit owned by the same employer’. According to FICCI, the conditions applicable in case of the closure of a unit—which mandates offering alternative employment in the ‘same zone’—would be difficult to meet in most cases. Opines Rajoo Goel, “In this case, if a worker is relocated to a distant unit, then the relocation costs should be considered and the consent of the worker should be taken, or else compensation should be given.”

FICCI has also proposed a new sub-clause that could be inserted after 25 FFF (1C).

However, ELCINA feels that this clause becomes redundant if the employee is provided with alternative employment in a group company with continuity of service. “In case employment is provided in a different company through the offices of the SPV in the NIMZ or outside it, then prior payment of compensation is desirable. The issue arises if a worker moves from company A to company B after five years of service on the same terms and conditions. In which case, how and why would company B provide compensation for the previous employment of five years in company A? The policy should not only facilitate movement of workers from one company to another when a company closes, but also provide for a mechanism to deposit such compensation amounts as may be due for prior employment, which can be released to the worker in the event of his subsequent layoff,” concludes Rajoo Goel.

—By Srabani Sen



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