What is Retrenchment and layoff - id act.. CiteHR

sujal_joshi0304 Started The Discussion:

Dear Seniors, Can anybody please tell me the difference between retrenchment and layoff.... i shall be obliged if i can get the proper defination for termination as well. Regards,

nilendrachand -  Member Since: Aug 2007
Dear Sujal,

Technical definition you can have from ID Act. grossly retrenchment means any termination which is not a disciplinary action inflicted on a workmen or VRS or retirement or superannuation or ending of a fixed term contract or termination of service due to continued illhealth.

Lay off means faliure, refusal or inability of employer due to shortage of raw material, coal, power, breakdown of machinery etc to provide employment. It is of temporary nature.

Termination means Dismissal, Retrenchment or Completion of a contarct or Non Renewal of Contract etc. Termination is not always negetive. All these activities are termed as termination.

shahanal12 -  Member Since: Apr 2007
Hello nilendrachand, A very precised explaination. It has cleared the things very well. thanks for sharing. regards,

talhasag -  Member Since: Feb 2007

As the difference between retrenchment and layoff is concerned, i would like to add in the remarks of the professionals.

Employers used these weapons (Retrenchment and layoff) to lessen their workforce due to heavy expenses, company defaulter, downs in business etc. In both techniques employees are terminated from "first come last go and last come first go method" But the difference between these two is that retrenched employees are promised legally that they will be recalled on job (last go first come method) when the conditions of business gets better but in layoff employees are terminated without any such promise after paying all their legal dues.
i have worked on this assignment in Saga Sports Sialkot pakistan (the biggest hand stitched soccer producer of Asia)


Sagheer Ahmed

vidisha.narula -  Member Since: May 2009
Dear Sagheer,

Can u please elaborate on the fact that retrenched employees may be called back after company's conditions improve.
Is it that retrenchment is temporary & layoff permanent?

Thanks & Regards,


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