Layoff in Labour Law
- ByAdmin --
- 21 Sep 2024 --
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Layoff in labour law
A layoff is the temporary removal of an employee from their position. When employers are unable to offer employment to workers due to circumstances outside of their control, the issue of keeping them unemployed comes up. These circumstances may include:
• Lack of basic supplies; • Economic downturn; • Equipment failures; • Stockpiling
Layoffs are usually implemented as a temporary solution to address immediate issues that the employer is facing, such as seasonal variations, economic downturns, or unanticipated events like the COVID-19 epidemic. One of the main goals of a layoff is to temporarily lower labor expenditures. When things become better, reemployment is anticipated.
Layoffs are controlled by the Industrial Disputes Act, 1947.
Layoff is defined in Section 2(kkk) of the Industrial Disputes Act, 1947 ("Act"), which states that a worker is laid off when an employer fails, refuses, or is unable to provide employment to a worker whose name appears on the muster roll of an industrial establishment for reasons beyond the employer's control.
Employees affected by such layoffs are entitled to compensation during the term of layoff. However, according to relevant articles of the ID Act, there are specific requirements precedent for granting compensation to such workers, which include:
1. The employer must be unable or unwilling to provide employment. 2. The workman's name must be on the industrial establishment's muster rolls. 3. The workman must have completed at least one year of continuous service.4. Avoid retrenching workers.
According to Section 25 C of the Industrial Disputes Act, a laid-off worker is entitled to 50% of his entire basic earnings and dearness allowance for the duration of the layoff. However, some requirements apply, such as: He is not a badli or a casual worker. His name should be on the establishment's muster roll. He should have had at least one year of continuous service with the organization.
Conditions in which workers are not eligible to layoff compensation
Section 25-E specifies various exceptions to the general rule regarding the payment of layoff compensation.
(i) A laid-off employee is not entitled to pay in the following situations.
If a laid-off worker refuses to accept alternative employment, it must be: (a) in the same establishment where they were laid off, or (b) in another establishment owned by the same employer and located within a five-mile radius of the original establishment, or (c) in the employer's opinion, the alternative employment requires no special skills or prior experience and can be performed by the worker.
(d) It pays the same as the worker's previous employment.
(ii) If a worker fails to arrive at their assigned time during normal working hours at least once per day.
(iii) If layoffs are due to a strike or halt in production by other employees within the establishment.
If a worker is not given compensation when he is legally entitled to it, he can seek redress by initiating an industrial dispute under the applicable sections of the Industrial Disputes Act of 1947.
In President, Birla Corporation Ltd and Another Versus Rajgovind Singh, MISCELLANEOUS PETITION NO. 1383 OF 2019, the Madhya Pradesh High Court ruled that a 'Badli Workman' cannot claim regular employment until he has completed 240 days in a calendar year. The Labour Court ruled that asking Birla Corp to give 15 days of work/PM to a "Badli Workman" was illegal because he had not worked for 240 days, and therefore annulled the award.
Conclusion:
Layoff is an employer's power, but it must be done with caution and in conformity with applicable legal laws. In India, layoffs are handled by the Industrial Disputes Act 1947. The Act is an important tool for safeguarding the rights and interests of both parties involved in employment disputes. This act establishes the principles and requirements that firms must follow when terminating personnel. Depending on the circumstances, the layoff could be lawful or illegal.
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