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CS Professional · Labour Laws and Practice · Law of Industrial Relations

A State law in Gujarat provides its own machinery for settling industrial disputes, and Mehta Plastics argues that the Code's chapter on lay-off and retrenchment therefore cannot govern its retrenchment of 12 workers. Applying the Code's clarification on State laws, which is correct?

The State dispute-settlement law is not affected, but employers' and workers' rights and liabilities regarding lay-off and retrenchment are determined under the Code's chapter. Mehta Plastics therefore cannot rely on the Gujarat law to avoid the Code on retrenchment of its 12 workers.

  1. AThe State law on settlement of industrial disputes is unaffected, but employer and worker rights and liabilities on lay-off and retrenchment are decided under the Code's chapterCorrect
  2. BThe State law wholly displaces the chapter, including on lay-off and retrenchment
  3. CThe Code's chapter wholly displaces the State law on settlement of industrial disputes
  4. DBoth apply equally and the employer may choose which governs retrenchment

Explanation

Section 76(2) declares that the chapter does not affect State laws on settlement of industrial disputes, but rights and liabilities relating to lay-off and retrenchment are determined under the chapter. So the State law survives for dispute settlement while retrenchment follows the Code. Option B reverses the carve-out.

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