Andhra Pradesh High Court: Partial Unit Shutdown Constitutes Closure Under ID Act

The Andhra Pradesh High Court has ruled that shutting down even a portion of an industrial unit qualifies as “closure” under Section 25F of the Industrial Disputes Act, 1947, when the unit is functionally integrated with the larger establishment.

The Court clarified that in such cases, affected workmen are entitled to closure compensation rather than reinstatement in other operational units, and noted that the petitioner’s unit had ceased operations permanently and all statutory dues had been duly settled.

The Court held that, since the other units were distinct establishments located in separate districts, the workman’s plea for absorption in those units was untenable.