jayavishali Started The Discussion:
Dear friends, what is the difference between retrenchement and layoff.anybody knows aboutthis please tell me. warm regards, jayanthi.a
Posted 25th March 2009 From India, Madras
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
Posted 25th March 2009 From India, Hyderabad
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.
Posted 25th March 2009 From India, Vadodara
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 of
raw 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 does
not matter i think you will get some idea about on these know Nanjundi
Posted 26th March 2009 From India, Bangalore
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
Posted 26th March 2009 From India, Kannur
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
Posted 26th March 2009 From India, Kannur
Dear Jayanthi.a, Plz go through the definition of both the terms & chapter VA & VB of the Industrial Disputes Act,1947. Regards, R.N.Khola Sr Associate Skylark Associates, Gurgaon
Posted 26th March 2009 From India, Delhi
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"
Posted 26th March 2009 From India, Mumbai
Thank you Mr Madhu for clearly differentiating two terms. Retrenchment is a permanent separation from the organisation, whereas lay-off is a temporary state when an employee remains out of the job. Surendra
Posted 26th March 2009 From India, New Delhi
Hierarchy of HR:razz: Plz let me know the exact hierarchy of HR....like i am now HR Executive....whats next....& wats the highest level... Looking for a positive reply... Parul (HR Exceutive)
Posted 26th March 2009 From India, Gurgaon
Dear Madhu Sir can i know 1.whether lay off/retrenchment comp should be calculated on 26 or 30 days?and i also want to know what constitute wages while calculating retrenchment compansation. Regards Atul
Posted 27th March 2009 From India, Delhi
i am management student . i want to help for project report in Hr field ,a primary sudy on primary research , any of corporte sectore in indian
Posted 27th March 2009 From India, Gandhidham
Dear mathu sir, Thanks 4 ur reply.now i’m clearly understand retrenchement and layoff.can u explain me what’s functions of hr department. Warm regards, Jayanthi.A
Posted 27th March 2009 From India, Madras
Retrenchment/ lay off compensation may be calculated on daily average arrived at by dividing monthly salary by 26. Salary/ wage for this purpose means basic salary plus dearness allowance. Any function which involves maintaining employee employer relationship right from recruitment till retrenchment shall be HR function. Therefore, identifying man power requirement, recruitment, selection, placing, training & development, performance appraisal, promotion, grievance handling, redressal of disputes, wage and compensation management, trade union negotiation, implementing welfare measures, management of absenteeism, preventing sexual harassment at workplace, implementing statutory requirements, taking disciplinary action, conducting domestic enquiry etc etc come under the HR. Regards, Madhu.T.K
Posted 27th March 2009 From India, Kannur
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Posted 27th March 2009 From China, Guangzhou
Hi,As per the above statement, i am 100% agree with Madhu, in case of Retrenchment we cutr the name of person from muster roll and in case of lay off we keep the name of employee on muster roll. or one can say permanently delete the name and in second case temporarely suspend the name.RegardsArun
Posted 27th March 2009 From India, Delhi
Sangeeta, you are wrong. Mr. Madhu T.K have already explained it in a nice way. You can read ID act. Dinesh
Posted 28th March 2009 From India, Faridabad
Dear Madhu T.K,

Whether there is need of permission for retrenchment and layoff if manpower is less than 100. Further, Which 100 manpower will be calculated i.e(100 on muster roll or 100 on factory license)?


Posted 28th January 2013 From India, Shahkot
Can you please let me know ?? if a manufacturing unit, total manpower is less than 20, then retrenchment is eligible for employee or not ?? if factory is going to close. Because company agree to pay only one month salary in advance.

Need urgent reply about this.

E: prit85barnwal@gmail.com
Posted 25th July 2015 From India, Delhi
whatever definations are given by seniors is a bookish languags which is a bit tuf to understand moreover they are simply not cleared
i want to have a clear understanding of difference between these two from the practical approach or in a simple language.
Posted 28th November 2015 From India, New Delhi


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