Hello Jayanthi, As far as I know, Retrenchment is the word used legally in India. Layoff is more of American origin and is extensively used in the IT industry...as you can guess why. Practically both mean the same...except the reasons. But I am sure there are better legal experts in this Group. let them answer too. Rgds, TS
layoff is given to employee when any incident(natural calamities)arise.or if company is not having work for specific period.then also layoff is to be given.
According to me
Lay-off means failure, refusal, or inability of a employer to give employement to a workman whose name is on the muster rolls of his industrial establishment and who has not been retrenched, on the account of lack of coal, lack of power, lack ofraw material, over stocking of output, failure of machinary, due to natural calamity, or due to any other connected reason and
Retrenchment means termination of service of an employee by an employer for any reason other than as a punishment due to disciplinary action. This does not include - voluntary retirement, superannuation, non-renewal of contract, termination on the ground of continued ill-health. For any reason what so ever - surplusage, redundancy due to advanced machinary, slowdown in business. Reason doesnot matter i think you will get some idea about on these know Nanjundi
By retrenchment is meant termination of employment by which employee is discharged of the duties paying compensation as prescribed under the Industrial Disputes Act. This refers to a permanent cessation of employment. The retrenchment compensation is 15 days salary for every completed year of service of the concerned employee. Lay Off, on the other hand, refers to temporary cessation of employment due to non availability of power, materials, breakdown of machinery, over stock, lack of order etc. The laid off employees will be paid lay off compensation as prescribed under the ID Act, ie, 50 % of salary. Once the work is regularised, the employees laid off will resume work as usual. The days for which they were laid off will not be counted as break in service but will enjoy all benefits of continuous service. For both retrenchment and lay off, prior intimation to the state government of the intention of the company to retrench and or lay off shall be given. In case of companies employing more than 100 employees, not mere intimation is sufficient but prior approval/ permission from the government to retrench or lay off employees is required. Regards, Madhu.T.K
Suneeta, Can you please tell where from you got this definition of Lay Off and Retrenchment? I do not understand your views in "However, in recent times the term can also refer to the permanent elimination of a position". Do you mean to say that permanent elimination is also lay off? Please specify whether your concept is with reference to India or not. Regards, Madhu.T.K
I think an added info to all the above replies would be.. even if person is laid off..he has to be taken back once the company starts with same prodution/department again. In other words, or in legal terms, it is that employees right to be taken back first if the company has opened the position/ or that departmnet again than looking out for someone new in a company. They use the funda of "LAST COME FIRST GO"
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