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Labour Law I
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B.A. LL.B. (Five Years) · Sem 5
2022 Oct (100 marks) Examination
munotes.in
Mumbai
B.A. LL.B. (Five Years) Sem 5 Labour Law I 2022 Oct (100 marks) Question Paper with Solutions
First published on munotes.in on 21 October 2026.
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The question paper reproduced here is the paper as set by Karnataka State Law University at the 2022 Oct (100 marks) examination.
Contents
The questions below are the paper as Karnataka State Law University set it at the 2022 Oct (100 marks) examination, in the order it was set.
MarksPage
MarksPage
The Paper as Set
The questions in this volume are the questions asked at the 2022 Oct (100 marks) examination, reproduced as Karnataka State Law University set them, in the order it set them. Long reading passages are shortened to their first and last lines and our summary; the original paper prints them in full. Only the answers are ours. See the original question paper.
Duration 3 hours · Total marks 100 · 13 questions answered
How to use this volume
Solve the paper first, under exam conditions and against the clock. Then read the answers here and mark your own. Reading a solution before attempting the question feels productive and teaches very little, because recognising an answer is not the same as being able to write one.
Q1Define and differentiate between Lock-out, Lay-off, retrenchment and closure.[16]
Answer
For full marks, cover: the four definitions in the Industrial Disputes Act 1947 with their elements: lock-out (section 2(l)), lay-off (section 2(kkk)), retrenchment (section 2(oo)) and closure (section 2(cc)); the single question that separates them (does the employment survive, and why does work stop); the pairwise distinctions with the cases: lay-off and lock-out (Kairbetta Estate), lock-out and closure (Tatanagar Foundry), retrenchment and closure (Hariprasad Shukla, section 25FFF), retrenchment and lay-off (Sundara Money, Punjab Land Development), the power to lay off (Firestone Tyre); the consequences of each: compensation, notice, permission and illegality; a full comparison table; the Industrial Relations Code 2020; a conclusion.
Why these four are studied together
In each of the four, workers who want to work are not given work. So a worker sees the same thing at the gate. The law, however, treats them very differently. The difference decides whether the worker is paid, how much, whether his employment survives, and whether the employer has broken the law. Two questions sort them out.
- Does the employment continue? In a lock-out and a lay-off it continues. In retrenchment and closure it ends.
- Why does the work stop? In a lock-out the employer uses the stoppage as a weapon. In a lay-off he cannot give work for a listed reason. In retrenchment he ends particular workmen's service in a business that carries on. In closure he shuts the business itself.
The four definitions
1. Lock-out: section 2(l). It means "the temporary closing of a place of employment, or the suspension of work, or the refusal by an employer to continue to employ any number of persons employed by him". Its elements are an act of the employer, a temporary character, and a purpose: to press the workmen to accept his terms. It is the employer's answer to the strike.
2. Lay-off: section 2(kkk). It means "the failure, refusal or inability of an employer" to give employment to a workman on the muster rolls who has not been retrenched. The cause must be "shortage of coal, power or raw materials or the accumulation of stocks or the break-down of machinery or natural calamity or for any other connected reason". A workman who reports for work and gets none within two hours is deemed laid off for that day.
3. Retrenchment: section 2(oo). It means "the termination by the employer of the service of a workman for any reason whatsoever, otherwise than as a punishment inflicted by way of disciplinary action". Voluntary retirement, superannuation, non-renewal of a fixed-term contract and termination for continued ill-health are excluded.
4. Closure: section 2(cc). It means "the permanent closing down of a place of employment or part thereof". It was inserted in 1982. Before that the courts drew the meaning from the cases.
Lay-off and lock-out
Both are temporary, and in both the employment continues. The difference is the reason. A lay-off is caused by something the employer cannot help, such as a breakdown or a power cut. A lock-out is a deliberate refusal of work to put pressure on the workers.
Management of Kairbetta Estate v. Rajamanickam, AIR 1960 SC 893. After violent conduct by workers, including an assault on the estate's manager, the management closed a division. Work was refused from 28 July to 2 September 1957. The workmen claimed lay-off compensation. The Supreme Court held that the stoppage was a lock-out, not a lay-off. It was the management's reaction to the workers' conduct, not a cause listed in section 2(kkk). So no lay-off compensation was due.
The employer also has no inherent power to lay off at will.
Workmen of Firestone Tyre and Rubber Co. of India (P) Ltd. v. Firestone Tyre and Rubber Co., (1976) 3 SCC 819. After strikes at its Bombay factory cut supplies, the company laid off seventeen of thirty workmen at its Delhi office without wages. The Supreme Court held that the power to lay off must come from the contract or the standing orders. Without it, the employer must pay for the period, ordinarily full wages.
Lock-out and closure
A lock-out shuts the place of work for a time, while the business continues. A closure ends the business itself, finally.
Tatanagar Foundry Co. Ltd. v. Their Workmen, AIR 1970 SC 1960. The company closed its business, citing its finances, a lack of orders and the workmen's non-cooperation. The Industrial Tribunal, Bihar found the business closed completely, but called it a lock-out because it was not bona fide. The Supreme Court set that finding aside. In a closure the employer closes the business itself, finally and irrevocably. The closure must be genuine, not a pretence, but the employer's motive is immaterial. As it was not caused by circumstances beyond his control, full compensation was payable under section 25FFF.
So the test is not motive but finality. A real and final closure is a closure, even if the employer was annoyed with the workers. A "closure" meant to be reopened when the workers give in is a lock-out.
Retrenchment and closure
In both, the employment ends. But retrenchment ends particular workmen's service while the business goes on. Closure ends everyone's employment because the business itself stops.
Hariprasad Shivshankar Shukla v. A.D. Divelkar, AIR 1957 SC 121. The Barsi Light Railway was taken over and Shri Dinesh Mills closed, and the workmen of both lost their jobs. The Supreme Court held that this was not retrenchment as then defined. Retrenchment meant discharging surplus staff in a continuing business. Parliament responded by giving closure its own compensation in section 25FFF. Workmen get notice and compensation "as if the workman had been retrenched".
Retrenchment and lay-off
Retrenchment ends the employment, while a lay-off only suspends work. A laid-off workman stays on the muster roll and is called back. The courts have read retrenchment widely.
State Bank of India v. N. Sundara Money, (1976) 1 SCC 822. A temporary appointment ended automatically at the end of its period. The Supreme Court held this to be retrenchment, because "for any reason whatsoever" covers every termination by the employer. The termination was invalid without compliance with section 25F.
Punjab Land Development and Reclamation Corporation Ltd. v. Presiding Officer, Labour Court, (1990) 3 SCC 682. A Constitution Bench confirmed that retrenchment is not limited to surplus labour. It covers any termination except the cases the definition itself excludes.
The consequences
- Lock-out. The Act gives no compensation. But a lock-out may be illegal under section 24. It is illegal if it breaks the notice rules for public utility services (section 22(2)) or the bars during proceedings (section 23). An illegal lock-out is punishable (section 26(2)), and the workmen may recover their wages for the period.
- Lay-off. An eligible workman gets fifty per cent of basic wages and dearness allowance for each day (section 25C). In an establishment of one hundred or more workmen, the Government's prior permission is needed (section 25M).
- Retrenchment. A workman with one year's service gets one month's notice or pay, and fifteen days' average pay for every completed year (section 25F). Prior permission is needed in larger establishments (section 25N).
- Closure. Sixty days' notice to the Government is needed in an undertaking of fifty or more workmen (section 25FFA). Compensation is as for retrenchment (section 25FFF). It is limited to three months' average pay where the closure is due to unavoidable circumstances beyond the employer's control. Financial loss alone is not such a circumstance. Larger undertakings need prior permission, applied for ninety days ahead (section 25-O).
At a glance
| Point | Lock-out | Lay-off | Retrenchment | Closure |
|---|---|---|---|---|
| Section | 2(l) | 2(kkk) | 2(oo) | 2(cc) |
| Nature | temporary closing as a weapon | temporary inability to give work | termination of particular workmen | permanent closing of the business |
| Employment | continues | continues | ends | ends |
| Cause | the employer's pressure | listed causes beyond control | any reason except punishment | the employer's decision to stop |
| Business | continues | continues | continues | ends |
| Point | Lock-out | Lay-off | Retrenchment | Closure |
|---|---|---|---|---|
| Payment | none; wages if illegal | 50 per cent compensation | notice and 15 days per year | notice and 15 days per year, capped in some cases |
| Prior permission (100 or more) | none; bars in sections 22 and 23 | section 25M | section 25N | section 25-O |
| Leading case | Kairbetta Estate | Firestone Tyre | Sundara Money | Tatanagar Foundry |
Where the law stands now
The 1947 Act was repealed on 21 November 2025 by section 104 of the Industrial Relations Code 2020. The four definitions are kept in the same words. Lock-out is in section 2(u), lay-off in section 2(t), retrenchment in section 2(zh) and closure in section 2(h). Retrenchment now also excludes the end of a fixed-term employment. Prior permission for lay-off, retrenchment and closure (sections 78 to 80) is needed only where three hundred or more workers are employed. A lock-out now needs notice in every industrial establishment, given within sixty days before it (section 62(2)). It may not begin within fourteen days of the notice.
Conclusion. The four concepts differ on two points: whether the employment survives, and why work stops. Lock-out and lay-off are temporary and the employment survives. A lock-out is the employer's weapon, while a lay-off comes from causes beyond his control, as Kairbetta Estate shows. Retrenchment and closure end the employment. Retrenchment removes particular workmen from a running business, while closure ends the business itself, as Tatanagar Foundry and Hariprasad Shukla show. Each carries its own rules on compensation, notice and permission.
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