Excel Wear v Union of India (1978)

Labour Law I · Lay-off, Retrenchment & Closure

Facts.

Employers challenged provisions requiring prior Government permission to close an undertaking, arguing it violated the freedom to carry on business.

Issue.

Can the State compel an employer to keep a business running?

Held.

The right to close a business is part of the freedom under Article 19(1)(g); an almost total ban on closure is unreasonable and unconstitutional, though reasonable regulation (notice, compensation) is valid.

Why it matters.

It balances the worker’s security against the employer’s freedom and frames the closure provisions studied above.

📄 Full Labour Law I notes + Question Bank (₹199) — every topic in depth, model answers to all past exam questions, in one printable PDF. Get the bundle · All landmark cases · All Labour Law I topics