What is lay off and on what grounds can the employer declare lay off?
Find the question and answer of Labour Law only on Legal Bites.
Question: What is lay off and on what grounds can the employer declare lay off?Find the question and answer of Labour Law only on Legal Bites. [What is lay off and on what grounds can the employer declare lay off?]AnswerLay off is a temporary suspension of work or reduction in working hours by the employer due to business-related reasons such as economic downturn, seasonal fluctuations, or lack of work. During the layoff period, employees are not paid, but they retain their employment...
Question: What is lay off and on what grounds can the employer declare lay off?
Find the question and answer of Labour Law only on Legal Bites. [What is lay off and on what grounds can the employer declare lay off?]
Answer
Lay off is a temporary suspension of work or reduction in working hours by the employer due to business-related reasons such as economic downturn, seasonal fluctuations, or lack of work. During the layoff period, employees are not paid, but they retain their employment status and are expected to return to work when the employer resumes normal business operations.
In General, Employers can declare a layoff on the following grounds:
Lack of work: When the employer does not have enough work for the employees to perform due to a decrease in demand for the products or services offered by the business.
Business slowdown or interruption: When the employer experiences a temporary business slowdown or interruption that requires the reduction of the workforce.
Restructuring or reorganization: When the employer decides to restructure or reorganize the business and needs to temporarily reduce the workforce.
Seasonal fluctuations: When the business experiences predictable seasonal fluctuations that require the temporary reduction of the workforce.
It is important to note that the grounds for a layoff should be genuine and not a pretext to terminate employees or avoid paying them compensation or benefits.
In India, the right to layoff employees is governed by the Industrial Disputes Act, 1947, which allows employers to lay off employees due to lack of work, seasonal fluctuations, or for any other reason beyond the control of the employer. However, the employer must follow the procedures laid down by the Act, which includes providing notice to the employees and obtaining permission from the government authorities in certain cases.
Lay off has been defined in section 2 (kkk) of the Industrial Disputes Act as follows:
"'lay-off' (with its grammatical variations and cognate expressions ) means the failure, refusal or inability of an employer on account of shortage of coal, power or raw materials or 'the accumulation, of stocks or the breakdown of machinery or for any other reason to give employment to a workman whose name is borne on the muster rolls of his industrial establishment and who has not been retrenched".
In the words of the Hon’ble Supreme Court in Priya Laxmi Mills Ltd v. Mazdoor Mahajan Mandal, Baroda, (1976) AIR 2584:
“Even according to the dictionary meaning, lay off means to discontinue work or activity; to dismiss or discharge temporarily. When workers are in employment and they are laid of, that immediately results in their unemployment, howsoever temporary..”
Mayank Shekhar
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