Rules 35-36 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.
Rule 35 requires an employer in a Chapter X establishment that intends to close down to apply to the Central Government in Form XIV, at least ninety days before closure takes effect, with a copy to the workers' representatives. Rule 36 sets the review of the order: thirty days to apply, two months to decide.
An employer intending to close an establishment to which Chapter X applies must apply for prior permission in Form XIV to the Central Government electronically, at least ninety days before the closure is to take effect, stating clear reasons, and send a copy to the representatives of the workers electronically and in person or by speed post. The Government's order may be reviewed: an application within thirty days, disposed of within two months after hearing the parties. Closure without permission, or after refusal, is illegal. Central-sphere establishments only.
Section 80 in brief
Section 80(1) of the Industrial Relations Code, 2020 requires an employer who intends to close an undertaking of an industrial establishment to which Chapter X applies to apply, electronically or otherwise, for prior permission at least ninety days before the intended closure, stating the reasons; a copy is served simultaneously on the representatives of the workers. Undertakings set up for construction of buildings, bridges, roads, canals, dams or other construction work are outside the sub-section. The Government hears the employer, the workers and interested persons, and may grant or refuse by a reasoned order, having regard to the genuineness and adequacy of reasons, the interests of the general public and other relevant factors (s.80(2)). If no order is communicated within sixty days, permission is deemed granted (s.80(3)). The order is final and stays in force for one year, subject to review or reference to a Tribunal (s.80(4) and (5)). Closure without timely application, or after refusal, is deemed illegal and the workers are entitled to all benefits as if the undertaking had not closed (s.80(6)). On permitted or deemed-permitted closure, each worker is entitled to compensation of fifteen days' average pay for each completed year of continuous service or part over six months (s.80(8)). Read section 80. Chapter X applies to factories, mines and plantations with at least three hundred workers, or a higher notified number (section 77).
Closure is a major step for any business, and the ninety days are a hard planning limit. Our labour law compliance team can prepare the Form XIV application, the annexures and the worker communication.
Rule 35: the application
An employer who intends to close an industrial establishment to which Chapter X applies shall:
- apply in Form XIV to the Central Government electronically for prior permission;
- do so at least ninety days before the date on which the intended closure is to become effective;
- state clearly the reasons for the intended closure; and
- simultaneously send a copy to the representatives of the workers, electronically and in person, or by speed post.
Note the wording in the copy step: "electronically and in person, or by speed post". The text reads as electronic service plus either hand delivery or speed post. Rule 35 does not require display at the main entrance, unlike rules 30(2) and 33(2).
Form XIV for closure
Clause (d) of the form states that, under section 80(1), the employer intends to close down the undertaking, with effect from a stated date, for the reasons in Annexure I, and gives the number of workers whose services would be terminated. The form states that the workers were given three months' notice in writing under section 80 (or three months' pay in lieu); that dues and compensation under section 67 read with section 80 have been or will be paid before or on expiry of the notice period (or a statement that insolvency proceedings are on); and that no court case is pending, or details are annexed. Annexure I asks for undertaking details, status, registration particulars, CIN and GSTIN, annual production, audit reports for three years, inter-connected companies, reasons and details of earlier lay-offs and retrenchment. Annexure II lists affected workers.
The form's note says closure applications are to be served at least ninety days before the intended date of closure, which matches rule 35 and section 80(1). The form is submitted online; on paper only in exigencies.
Rule 36: review of the order
| Sub-rule | Requirement |
|---|---|
| 36(1) | The Central Government may, on its own motion or on an application of the employer or any worker, review its order granting or refusing permission for closing down |
| 36(2) | The employer or any worker concerned may apply, along with the order, within thirty days from the date of the order; the Government disposes of the application within two months from the application after giving the parties an opportunity of being heard |
| 36(3) | For review on its own motion, it may act within one month of the order and, after hearing the parties, dispose of the review within two months from the date of the decision |
Section 80(5) allows review "within the prescribed time", or reference to a Tribunal, which must give its award within thirty days of the reference. Rule 36 supplies the thirty-day and two-month periods.
Closure: two different regimes
| Feature | Chapter IX closure | Chapter X closure |
|---|---|---|
| Source | s.74; rule 29 | s.80; rules 35 and 36 |
| Nature | Notice to the Government | Application for prior permission |
| Lead time | At least sixty days | At least ninety days |
| Form | Form XIII | Form XIV |
| Deemed position | Not applicable | Permission deemed granted if no order in sixty days (s.80(3)) |
| Copy to workers | Registered unions or authorised representatives (rule 29(2)) | Representatives of workers (rule 35) |
See rule 29 for the Chapter IX notice, and our note on the old law, closure of an undertaking under the Industrial Disputes Act, for background only.
Example. A mining company with more than three hundred workers decides to close a mine with effect from 1 December. It files Form XIV electronically well before 1 September (ninety days earlier), states its reasons, and sends a copy to the workers' representatives electronically and by speed post. The Government refuses permission. The company and a union each consider review; either may apply within thirty days of the order, attaching it, and the Government must decide within two months after hearing them. If the company closes without permission, the closure is illegal under s.80(6).
Practical points
- Count ninety days back from the effective date of closure, not from the date of the board's resolution.
- Keep proof of electronic filing and of service on representatives.
- Prepare Annexure I early; it needs three years of accounts and production data.
- Plan for compensation under s.80(8) when permission is granted.
Need help with a closure application?
The ninety days, the annexures and the service on workers' representatives all have to line up. Our labour law compliance team can prepare the Form XIV application, organise the supporting data and draft a review application if needed.
Key takeaways
- Chapter X closure needs prior permission, applied for at least ninety days before closure takes effect.
- Rule 35: Form XIV, electronically, with clear reasons, and a simultaneous copy to workers' representatives.
- No order in sixty days means deemed permission (s.80(3)).
- Review: thirty days to apply, two months to decide (rule 36).
- Closure without permission, or after refusal, is illegal.
Read next
- Section 80: prior permission for closing down an undertaking
- Section 74: sixty days' notice of closure
- Rules 33 and 34: application for retrenchment and review
- Section 75: compensation to workers on closure
Disclaimer: Based on the Industrial Relations Code, 2020 (as enacted) and, where noted, the Industrial Relations (Central) Rules, 2026 (G.S.R. 342(E), 8 May 2026), as on 30 September 2026. The Code is in force from 21 November 2025; some provisions may be notified later, and State Governments make their own rules for establishments where the State is the appropriate Government. Verify the current position before acting.