‘LAY-OFF’

LAY-OFF
FAILURE,
REFUSAL OR
INABILITY

OF AN
EMPLOYER

SHORTAGE OF ACCUMULATI BREAKDOWN ANY OTHER

SHORTAGE OF SHORTAGE OF RAW
RAW ON OF OF CONNECTED
COAL POWER MATERIAL
MATERIALS STOCKS MACHINERY REASON

TO GIVE WHOSE NAME

WHO HAS NOT
EMPLOYMENT IS PRESENT IN
BEEN
TO A THE MUSTER
RETRENCHED
WORKMAN ROLL
 DEFINITION
SECTION 2(kkk)
[IR CODE 2020: SECTION 2(t)]
■ Worker who presents himself for work at the establishment at the time appointed for the purpose
during normal working hours on any day and is not given employment by the employer within two
hours of his so presenting himself shall be deemed to have been laid- off for that day.
■ Provided that if the workman, instead of being given employment at the commencement of any
shift for any day is asked to present himself for the purpose during the second half of the shift for
the day and is given employment then, he shall be deemed to have been laid- off only for one- half
of that day
■ Provided further that if he is not given any such employment even after so presenting himself, he
shall not be deemed to have been laid- off for the second half of the shift for the day and shall be
entitled to full basic wages and dearness allowance for that part of the day
 PROHIBITION OF LAY-OFF
SECTION 25M
[IR CODE 2020: SECTION 78]

■ Applicable to industrial establishment (not seasonal in character) in which not less than 100
workmen [IR CODE: 300 WORKERS OR SUCH HIGHER NUMBER AS NOTIFIED BY
APPROPRIATE GOVT.] are employed on an average per working day for the preceding
twelve months.
■ No worker, whose name is borne on the muster roll, shall be laid-off by employer except with
prior permission of the appropriate govt., unless it is due to shortage of power, or natural
calamity, or in mines due to fire, flood, excess of inflammable gas or explosion.
■ In mines – within a period of 30 days from commencement of lay-off, apply to the appropriate
govt. to continue lay-off.
 PROCEDURE APPROPRIATE
GOVT. AFTER
MAKING
NECESSARY
INQUIRY +
APPLICATION APPLICATION
COPY TO BE GIVING
FOR TO CLEARLY GENUINENESS
SIMULTANEOUS REASONABLE GRANT OR
PERMISSION TO STATE THE AND
LY SERVED ON OPPORTUNITY REFUSE SUCH
THE REASONS FOR ADEQUACY OF
WORKMEN OF BEING PERMISSION
APPROPRIATE INTENDED LAY- REASONS
CONCERNED HEARD TO THE
GOVT. OFF
EMPLOYER,
CONCERNED
WORKMEN AND
OTHER
PERSONS
INTERESTED

COMMUNICATI
ON NOT MADE SHALL
WITHIN PERIOD COMMUNICA
OF 60 DAYS OF TE SUCH
APPLICATION ORDER TO
BEING MADE – EMPLOYER
PERMISSION
DEEMED TO AND
HAVE BEEN WORKMEN
GRANTED
 PROHIBITION OF LAY-OFF
SECTION 25M
[IR CODE 2020: SECTION 78]
■ Order shall be binding on all parties
■ Order to remain in force for 1 year from date of such order
■ Review order or refer to tribunal for adjudication – either by appropriate govt. or
application by employer/workman
■ No application for permission is made or application refused – lay-off shall be deemed
to be illegal
■ If employer provides alternative employment – worker shall not be deemed to be laid-
off
 LAY-OFF COMPENSATION
SECTION 25C
[IR CODE 2020: SECTION 67]

■ Whenever a workman, who has completed not less than one year of continuous service under an
employer is laid-off, he shall be paid by the employer for all days during which he is so laid-off,
compensation which shall be equal to fifty per cent. of the total of the basic wages and dearness
allowance that would have been payable to him had he not been so laid-off.
■ However, If in preceding 12 months – worker is laid off for more than 45 days – no
compensation after expiry of 45 days – if there is an agreement between the employer and
workers.
■ Alternatively, the employer may retrench the workmen at anytime after the expiry of 45 days –
lay-off compensation may be set-off against retrenchment compensation.
P. Virudhachalam v Management of Lotus Ltd. 1998 Lab.IC 834 SC
Agreement as part of settlement in conciliation proceedings, even though individually each worker
may not have signed the same, would still be covered under the proviso.
 SCOPE AND COVERAGE OF
SECTION 25C TO 25E
■ Not applicable to:
– Industrial establishments employing less than 50 workers on an average per
working day
– Seasonal industrial establishments
– Industrial establishments where work is performed intermittently
 WORKMEN NOT ENTITLED TO COMPENSATION
SECTION 25E
[IR CODE 2020: SECTION 69]

IF LAY-OFF IS DUE TO DOES NOT PRESENT

STRIKE OR SLOWING- HIMSELF FOR WORK
REFUSES TO ACCEPT
BADLI OR CASUAL DOWN OF AT APPOINTED TIME
ALTERNATIVE
WORKMEN PRODUCTION IN DURING WORKING
EMPLOYMENT
ANOTHER PART OF HOURS ATLEAST
THE ESTABLISHMENT ONCE A DAY

Associated Cement Companies Ltd. v Their Workmen (1960) 1 LLJ SC 7

Existence of two jurisdictions does not necessarily imply that for all purposes of the Act, and particularly
for payment of unemployment compensation, the factory and quarry must be treated as separate
establishments. Workers not entitled to lay-off compensation.