Lay-off & Retrenchment

Lay-off & Retrenchment

Lay – 0ff Definition Section 2 (kkk) : Lay-offs 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 break down 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.

Essentials of lay-off • There must be the (i) failure, (ii) refusal or (iii) inability of the employer to give employment to a workman. • The names of the workman laid off must be in the muster rolls on the date they have been laid off. • Te • He failure, refusal or inability must be on account of one or more of the following:

Lay-off (contd.) • Shortage of coal • Shortage of power • Shortage of raw materials • Accumulation of stocks • Breakdown of machinery • Natural calamity or for any connected reason The workman in question must not have been retrenched.

Classification of lay-off On the basis of duration (i) Lay-off for a day occurring when work is denied within two hours of his presenting himself for work. (ii) Lay-off for one half of day occurring when work is denied in the first half of the shift but the workman is called in the second half of the shift for doing work (iii) Lay-off for more than a day but not amounting to retrenchment

Rights of workman laid-off • Whenever a workman (other than badli workman) whose name is borne on the muster rolls and who has completed not less than one year of continuous service is laid off, he shall be paid by the employer for all days during which he is so laid off, except for such weekly holidays as may intervene. • First 45 days • Retrenchment after 45 days.

Retrenchment Section 2 (oo): Retrenchment means the termination by the employer of the service of a workman for any reason whatsoever, otherwise than as a punishment inflicted by way of disciplinary action, but does not include -

Retrenchment • (a) voluntary retirement of workman • Retirement of the workman on reaching the age of superannuation if the contract of employment between the employer and the workman concerned contains a stipulation in that behalf; or

Retrenchment • Termination of the service of the workman as the result of the non-renewal of the contract of employment; beween the employer and the workman concerned on its expiry or of such contract being terminated under a stipulation in that behalf contained therein; or • Termination on the ground of continued illhealth

Essentials of retrenchment • Termination of service • On the ground of surplus labour • The terminated service must have been capable of being continued • For any reason but should not be actuated by any motive of victimisation or unfair labour practice • Termination must be of surplus labour in a continuing industry; thus closure is not retrenchment

Essentials (contd) • The termination must be for proper reason such as economy, rationalisation, installation of labour saving machinery, or any other industrial or trade reasons • Termination should not fall within the exclusion clause of the definition.

Conditions precedent to retrenchment • One month’s notice in writing giving reason or paid in lieu of such notice • The workman has been paid, compensation equivalent to 15 day’s average pay for every completed year of continuous service or any part thereof in excess of six months • Notice in the prescribed manner on the appropriate government by notification in the Official Gazette

Transfer • Compensation to workmen in case of transfer of undertakings (Section 25-FF)