Retrenchment Closure explained: this guide covers what it means, who it applies to, the step-by-step process, documents required, fees, due dates and penalties in India — so you can stay compliant with confidence and avoid costly mistakes.
Chapters VIII to XI of the Industrial Relation (Bihar) Rules, 2026 (rules 42 to 55) give the forms and periods an employer in Bihar must follow when a strike or lock-out notice is received or given, when a worker is retrenched, and when an employer seeks prior permission for lay-off, retrenchment or closure. They also fix the payment an employer makes to the worker re-skilling fund.
The rules are the Industrial Relation (Bihar) Rules, 2026, as notified in the Bihar Gazette (Extraordinary) No. Patna 698 of 1 July 2026. Rule 1(iii) says they come into force on the date of their publication in the Official Gazette. Notice of strike is in Form XX, lock-out in Form XXI, retrenchment in Form XXII, and prior permission in Form XXIII. An employer who retrenches a worker transfers fifteen days of last drawn wages to the State account within ten days (rule 55). An application for closure permission is made at least ninety days before the intended date (rule 52).
Later amendments and State notifications under these rules should be checked in the State Gazette. An employment and labour law advisory review is sensible before any retrenchment or closure step.
Strike and lock-out notices (rules 42 and 43)
| Notice | Form | Who signs or gives | Copies | Rule |
|---|---|---|---|---|
| Notice of strike | XX | Signed by the Secretary and five elected representatives of the registered trade union, given to the employer | Endorsed electronically to the district conciliation officer and Labour Commissioner, Bihar | 42(1) |
| Employer receiving a strike notice from a person employed | The employer | Intimates the conciliation officer and Labour Commissioner electronically within five days of receiving | 42(2) | |
| Notice of lock-out | XXI | Employer to the Secretary of every registered trade union | Endorsed electronically to the conciliation officer and Labour Commissioner; displayed on the notice board at the main entrance | 43(1) |
| Employer giving a lock-out notice to a person employed | The employer | Intimates electronically within five days from the date of the notice | 43(2) |
The date the conciliation officer receives the notice is the date of receipt for starting conciliation. The Central rules are explained in our post on rules 25 and 26 of the Central Rules, notice of strike and lock-out.
Retrenchment notice and re-employment (rules 44 and 45)
An employer who wants to retrench a worker in continuous service for not less than one year gives prior notice of intimation in Form XXII to the Deputy Labour Commissioner of the area, electronically or otherwise (rule 44):
- where notice is given to the worker, the intimation is sent within three days from the date notice is served on the worker;
- where no notice is given and one month's wages are paid in lieu, within three days from the date the wages are paid;
- where retrenchment is under an agreement that specifies a termination date, so as to reach the State Government and the Deputy Labour Commissioner at least one month before that date, or within three days of the agreement if the agreed date is within thirty days of the agreement.
Rule 45 covers re-employment. The employer prepares a list of the workers in the category from which retrenchment is contemplated, by seniority, and pastes it on a conspicuous notice board at least seven days before the actual date of retrenchment (rule 45(1)). When a vacancy occurs and workers were retrenched within one year before the proposal to fill it, the employer gives preference by seniority to those who are citizens of India and have expressed willingness (rule 45(2)). Vacancy details are displayed at least fifteen days before the date they are to be filled, with intimation by registered post, speed post or email to each eligible retrenched worker at the latest address given (rule 45(3)). Where vacancies are fewer than retrenched workers, intimation to the senior-most workers, double the number of vacancies, is sufficient; there is no obligation for a vacancy of less than one month; and a worker who does not offer himself on the specified date without sufficient cause shown in writing may be left out of later intimations. The employer then informs the negotiating union, the council constituents or the trade unions of the number of vacancies and names of those intimated (rule 45(4)). The Central rules are in our post on rules 27, 28 and 29 of the Central Rules, retrenchment, re-employment and closure notice.
Closure notice (rule 46)
An employer intending to close down an establishment gives notice, within the time specified in section 74(1) of the Code, in Form XXII to the State Government, with a copy to the concerned authority of the area as notified by the State Government, by email and registered post or speed post, and a copy to the registered trade unions or authorised worker representatives. The rule itself prints no number of days; the Code governs the period.
Prior permission: lay-off, retrenchment and closure (rules 47 to 53)
Chapter X of the Code applies to certain establishments, and the rules print the application mechanics. All three applications use Form XXIII.
| Application | What the rule prints | Rule |
|---|---|---|
| Lay-off permission | Form XXIII stating reasons; copy served simultaneously on the worker concerned electronically, in person or by registered or speed post; displayed at the main entrance | 47 |
| Continuing a lay-off in a mine (fire, flood, excess of inflammable gas or explosion) | Application to the State Government within thirty days from commencement of the lay-off, electronically and by registered or speed post, stating the days sought, workers laid off, total workers, date and reasons | 48 |
| Retrenchment permission | Form XXIII stating reasons, electronically; copy to the workers and displayed at the entrance | 50 |
| Closure permission | Form XXIII electronically at least ninety days before the date closure is to become effective, with a copy simultaneously to worker representatives | 52 |
| Review of an order | Application within thirty days from the date of the order; State Government disposes within two months after hearing | 49, 51, 53 |
| Review on the State's own motion | Within one month from the date of the order; disposal within two months from the step taken | 49(3), 51(3), 53(3) |
For the Central rules, see our posts on rules 30 to 32 and rules 35 and 36 of the Central Rules.
The worker re-skilling fund (rules 54 and 55)
Rule 54 says the State Government may contribute to the fund; corporate bodies may contribute as Corporate Social Responsibility; and any individual may contribute. Rule 55 puts a payment duty on the employer: every employer who has retrenched a worker or workers shall, within ten days, at the time of retrenching, electronically transfer an amount equivalent to fifteen days of last drawn wages of each retrenched worker to the account maintained by the State Government, whose name is displayed on the website of the Labour Resource Department. The State transfers the amount to each worker's account electronically within forty five days of receipt, and the worker uses it for re-skilling. The employer submits a list with each worker's name, the amount equal to fifteen days of last drawn wages, and bank account details. Our post on rule 37 of the Central Rules, worker re-skilling fund contribution covers the Central rule.
A worked example
Bhojpur Oil Mills Ltd, Arrah, retrenches a clerk with four years' service. It gives him one month's notice and sends Form XXII to the Deputy Labour Commissioner within three days of serving it. At least seven days earlier it has pasted the seniority list on the notice board. Within ten days of retrenching, it transfers fifteen days of the clerk's last drawn wages to the State account and sends the list with bank details. Six months later, with a vacancy open, it displays the details fifteen days before filling it and writes to the retrenched clerk.
Need help with retrenchment or closure in Bihar?
Retrenchment and closure carry several short periods at once: three days for the intimation, seven days for the list, ten days for the fund payment, ninety days for closure permission. Our employment and labour law advisory team can build a dated checklist for your case from the Bihar text.
Key takeaways
- Strike notice is in Form XX; lock-out notice in Form XXI; both are endorsed electronically to the conciliation officer and Labour Commissioner (rules 42 and 43).
- Retrenchment intimation is in Form XXII, within three days or one month before the agreed date, as the rule says (rule 44).
- Seniority list is posted at least seven days before retrenchment; vacancy details at least fifteen days before filling (rule 45).
- Prior permission applications use Form XXIII; closure needs ninety days (rules 47 to 52).
- Fifteen days of last drawn wages go to the State re-skilling account within ten days of retrenching (rule 55).
Read next
- Industrial Relation (Bihar) Rules, 2026: arbitration, conciliation and Tribunal procedure
- Industrial Relation (Bihar) Rules, 2026: compounding of offences, miscellaneous rules and forms
- Rule 37 of the Central Rules: worker re-skilling fund contribution
Disclaimer: Based on the State or Union territory rules named above, as notified under the Labour Codes and consulted on 4 October 2026. Later amendments, State notifications, fees and forms should be checked in the State Gazette and on the State labour department website. This article is general information, not legal advice; check the official text before acting.