Indian Legal System > Civil Laws > Industrial Disputes Act, 1947 > Lay-off
Lay-off is one of the important factors which may lead to an industrial dispute.
Explanation of the Term Lay-Off:
- Lay-off is defined in Section 2 (kkk) of the Industrial Disputes Act, 1947.
- “Lay-off” 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 natural calamity or for any other connected 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.
Necessary Ingredients of Lay-Off:
- There must be failure, refusal or inability on the employer’s part to give the workman concerned.
- Such failure or refusal should be on account of shortage of coal, power or raw materials or the accumulation of stocks or the breakdown of machinery [or natural calamity or for any other connected reason].
- The workman’s name should be on the muster rolls of the industrial establishment.
- The workman should not have been retrenched.
Illegal Lay-off:
- If there is a failure, refusal or inability on the employer’s part to give the workman concerned due to any other reason than those specified in the definition of lay-off in section 2(kkk) of the Industrial Disputes Act, 1947, then the lay-off is illegal and malafide one.
Case Laws:
Kairbetta Estate v. Raja Manickam, (1960 II LLJ 275 SC):
- By this case, it is established that slow down in one part (say A) of establishment can be a reason for layoff in next part (say B) of the establishment for which a raw material is supplied by the department A which is slowed down. Thus there is less work in department B. Hence workmen from department B can be laid-off. Court held that this condition is coming under the phrase “any other reason”.
Workmen of Dewan Tea Estate v. Their Management, (1964 I LLJ 358 SC):
- Court held that the financial difficulties of the employer cannot become the basis of lay-off.
Tatanagar Foundry Co. v. Their workmen, (1962 I LLJ 382 SC):
- Court held that if the employer fails to pay adequate lay-off compensation to the laid-off workmen, then the lay-off is illegal.
Raj sahib Spg. & Wvg Mills v. Labour Commissioner, Maharashtra (AIR 1968 Bom. 161):
- In this case, the Court held that there can be a lay-off for even less than 2 hours.
Duties of the Employer in Connection with Lay-Off:
- The employer must maintain a muster roll of workmen and to provide for the making of entries therein by workmen who may present themselves for work at the establishment at the appointed time during normal working hours notwithstanding that workman in any industrial establishment have been laid off.
- The lay-off must be for the reasons specified in Section 2(kkk).
- He can lay-off the workman only with the prior permission of the appropriate government or such authority as may be specified by that government on an application made in this behalf (as amended by the Industrial Disputes Amendment Act, 1984).
- The period of detention of workmen if a stoppage occurs during working hours should not exceed two hours after the commencement of the stoppage.
- The compensation for lay-off must be at the rate and for the period specified in Section 25-C of the Industrial Disputes Act.
Duties of Appropriate Government:
- An employer can lay-off the workman only with the prior permission of the appropriate government or such authority as may be specified by that government on an application made in this behalf (as amended by the Industrial Disputes Amendment Act, 1984).
- An application for permission shall be made by the employer in the prescribed manner stating clearly the reasons for the intended lay-off. A copy of such application shall also be served simultaneously on the workmen concerned.
- Where an application for permission has been made, the appropriate government or the specified authority shall make necessary enquiry as it thinks fit. It shall give a reasonable opportunity of being heard to the employer, the workmen concerned, and the persons interested in such lay off.
- The appropriate government, having regard to the genuineness and adequacy of the reasons for such lay-off, to the interest of the workmen, and all other relevant factors by order and for reasons to be recorded in writing, grant or refuse to grant such permission. A copy of the order of the appropriate government or prescribed authority shall be communicated to the employer and the workmen.
- An order of the appropriate government or the specified authority granting or refusing to grant permission shall be final and binding on all the parties concerned and shall remain in force for one year from the date of such order.
- Where no application for permission has been made, or where the permission for any lay off has been refused, such lay-off shall be deemed to be illegal from the date on which the workmen had been laid off. The workmen shall be entitled to all the benefits under any law for the time being in force as if they had not been laid-off.
- The appropriate government or the specified authority may either on its own motion or on the application made by the employer or any workman, review its order granting or refusing to grant permission or refer the matter to a tribunal for adjudication. Where a reference has been made to a tribunal it shall pass an award within a period of thirty days from the date of such reference.
- Where an application for permission has been made, and the appropriate government or the specified authority does not communicate the order granting or refusing to grant permission to the employer, within a period of sixty days from the date on which such application is made, the permission applied for shall be deemed to have been granted on the expiration of the said period of sixty days.