LAY-OFF, RETRENCHMENT AND CLOSURECentral

Section 72 of The Industrial Relations Code, 2020

Where any worker is retrenched and the employer proposes to take into his employment any person within one year of such retrenchment, he shall, in such manner as may be prescribed, give an opportunity to the retrenched workers who are citizens of India to offer themselves for re-employment and such retrenched workers who offer themselves for reemployment shall have preference over other persons.

Summary

If an employer lets a worker go (retrenchment) and then wants to hire someone new within one year, they must give the old worker a chance.
The employer must offer the job to the retrenched workers before hiring outsiders.
This preference applies to workers who are citizens of India.
The employer must follow a specific process (as set by rules) to notify the former workers.
Former workers who offer themselves for the job must be given preference over other applicants.

Practical examples

1Sunita was retrenched from a hotel in January 2025 because business was slow. In October 2025, the hotel starts hiring again. Under Section 72, the manager must contact Sunita and give her the chance to take her old job back before they hire a new person from the street.

2A car parts factory lets go of 20 workers. Eight months later, they need 5 new staff. They post a notice as required by Section 72. Two of the old workers, David and Maria, apply. The factory must hire David and Maria before considering any of the other 50 new people who applied.

FAQ

1. How long does my right to be rehired last?

It lasts for one year from the date you were retrenched.

2. Does the company have to find me and tell me about the job?

Yes, they must give retrenched workers an opportunity to offer themselves for re-employment in the manner prescribed by the rules.

3. Do I get my old job back automatically?

No, you must "offer yourself" for the job (apply), and then you get preference over other people.

Test yourself

Q1.Under Section 72 of The Industrial Relations Code, 2020, how long is the period during which an employer must give preference to retrenched workers for new openings?

Q2.According to Section 72 of The Industrial Relations Code, 2020, which group of retrenched workers is entitled to this preference?

Q3.Under Section 72 of The Industrial Relations Code, 2020, what is the employer's obligation if a retrenched worker offers themselves for re-employment?

Q4.If a company retrenched workers in 2023 and decides to hire new staff in 2026, does Section 72 of The Industrial Relations Code, 2020, require them to give preference to the 2023 workers?

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