LAY OFF - INDUSTRIAL DISPUTES ACT 1947
- S. ASHOK KUMAR
ASSISTANT PROFESSOR
CHENNAI Dr. AMBEDKAR GOVT. LAW COLLEGE,PUDUPAKKAM.
DEFINITION
• Section 2(kkk) of ID Act, 1947 defines, “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 stock or the breakdown of machinery or for any other reasons to give
employment to a workman, whose name is borne in the muster roll of his industrial
establishment and who has not been retrenched”.
• Originally the Industrial Dispute Act did not provide provisions for lay-off.
MEANING OF LAY OFF
• Lay off is occasioned by the employer’s failure or inability on account of economic
reasons to give employment to the workman.
• The relation between the employer and employed during lay-off is only suspended and
employees continue to be on the muster roll of the employer and they have to be
reinstated as soon as normal work is resumed.
CONDITIONS FOR LAY OFF
In order to layoff, the following conditions are to be fulfilled:
(i) There should be failure or refusal or inability of an employer to give employment to a workman
(ii) Such workman should be on the muster-roll of the industrial establishment and should not have been
retrenched.
Such inability to provide employment should be on account of the following reasons:
(a) Shortage of coal, power or raw materials or
(b) Accumulation of stocks or
(c) Breakdown of machinery or
(d) Natural calamity or for any other connected reason.
• “The words “for any other reason in section 2(kkk)” must be considered analogue with the words.
• A workman is deemed to have been laid-off for that day when he is not given employment
within two hours of his being present for work.
• If such workman is provided work in the second half of the next shift, he is deemed to be laid-off
only for the half-day.
MUSTER ROLL AND CONTINUOUS SERVICE
❖Muster Roll - Attendance register of an employee or workmen in establishment.
❖According to Section 25(D), it is the duty of the employer to maintain muster-rolls of workmen.
❖For incorporating the name in muster roll, a workman should have put in continuous service
• A workman is put in continuous service for one year [s. 25(B)]
❖ The service is construed as continuous for a period of one year if the workman works in the
previous year for:
• 190 days- below the ground in a mine.
• 240 days- in any other job.
For a period of 6 months, considered as continuous service if the workman works in preceding 6
months for:
• 95 days- below the ground in a mine.
• 120 days- in any other job.
CONTINUOUS SERVICE
• Continuous service means uninterrupted service. However, interruption
on account of any of the following reasons will still deem such service
to be uninterrupted.
• a) Sickness;
• b) Authorized leave;
• c) Accident;
• d) Strike which is not illegal;
• e) Lock-out;
• f) Cessation of work which is not due to any fault on the part of the
workman.
LAY OFF COMPENSATION (S.25C)
• The employer has the duty to provide compensation to the workmen .
Amount of compensation:
• A workman shall be entitled for 50% of the total of basic wages and D.A.
• Lay-off compensation payable under Section 25C is not wages within the
meaning of the term ‘wages’ in the Payment of Wages Act, 1936.
• Lay-off compensation is payable for all days of lay-off. The maximum
period for which compensation payable is 45 days during any period of 12
calendar months.
WORKMEN NOT ENTITLED TO COMPENSATION
(S.25E)
If a workman, refuses to accept any alternate employment offered by the employer in
the same establishment, or in any other establishment of the same employer, provided
such establishment is within a 8Kms radius from the previous establishment.
• such alternate employment should not call for any special skill or experience
• If he does not present himself for work at the establishment at the appointed time
during normal working hours at least once a day;
• such lay-off is due to a strike or slowing-down of production by workmen in another
part of the establishment.
• The employer must pay at least the same wages as were previously paid to the
workman.
PROHIBITION OF LAY-OFF- SEC. 25M
• Employer to implement Layoff to employees ( other than badly workmen or
casual workmen) only with prior permission from specified authority in the
Official Gazette
• Application to be filed for Lay-off
• If Lay-off is due to shortage of Power or Natural Calamity
• If In mines, due to fire, flood, excess of inflammable gas or explosion.
• If no application made, or application is refused, such layoff will be illegal
Lay-off and benefits of full wages will be granted for employees.
CASE LAWS
➢ Tatanagar Foundry Co v. Their Workmen 1962 I LLJ 382 (SC)
• A lay-off declared mala fide by the employer to victimize the workmen is not lay-off
contemplated by Section 2(kkk) of the Act.
➢ Zandu Pharmaceutical Ltd. v. RN Kulkarni & Co (1966) 1 LLJ 560, 562 (Bom)
• Laying-off workmen results in depriving them of the opportunity to work and earn wages.
➢ Anusuyabai Vital v. J.H. Mehta, 1959 II LLJ 742 (Bom)
• Layoff compensation does not fall within the definition of wages since not being
remuneration or paid for employment.
➢ P. Virudhachalam & Ors. v. The Management of Lotus Mills & Anr., 1998 I LLJ 389 (S.C.2J)
• Not payable beyond 45 days when there is agreement regarding payment of layoff
compensation to that effect.
➢ Ashok Kumar Jain & Ors. v. State 685 (S.C.2J)
• Management can be prosecuted for laying-off if no permission is taken.
➢ Industrial Employees Union v. J.K. Cotton Spinning and Weaving Mills Company, (1956) I LLJ 327
• Offering a job of coolee to a skilled workman who was laid off would not amount to
alternative employment.
THANK YOU !!
