I'm studying MBA in Germany and urgently need inside information about the layoff rules & regulations in India. The fictive topic of my current case study is: German pharmaceutical company wants to shut down its subsidary in India with over 500 employees.
I know already that you have to get permission from Government for layoff through the Industrial Disputes Act, 1947. But what is the procedure? What are the requirements, bans and rules? Are there timeframes to consider? Anything about compensatory payments?
Maybe somebody know about a similiar but actual case?
I appreciate your help!
XX to impressing India!

From Germany, Munich
Labour Law & Hr Consultant
Industrial Relations And Labour Laws
Dy. Mgr - Hr
+4 Others


Since your establishment has more than 100 employees the chapter V B of the Industrial Disputes Act, 1947, will apply to you. As such, prior permission to lay off employees is required to be obtained from the Government. For this you have to apply to the appropriate government in the prescribed form (form Q-3). Once you get permission to lay off only you can proceed with laying off. Remember that lay off is permitted only for certain specific reasons. As defined in section 2(kkk) of the ID Act, 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 stocks or the break-down of machinery or natural calamity or for any other connected reason to give employment to a workman. This being the situation the government will have to see whether the layoff applied for is really a lay off or the first step to retrenchment or closing of establishment.

From India, Kannur
My company informed us their is financial crisis. salaries are been paid after 2-3 months. now they have started lay off. my concern is if they do lay off than how much salary do they have to pay us. Is it pending salary and one month salary extra in advance. please suggest they are paying us only are pending salary.
From India, Mumbai

If you mean to say that there is lay off due to reasons mentioned by me in my earlier post, then all those who are laid off will be getting lay off compensation at the rate of 50% of salary for 45 days.

If you mean to say that there is a permanent closure and thereby all are asked to leave the company, then it is not lay off but retrenchment. In such scenario those who have worked for at least one year will get compensation. The retrenchment compensation will be equal to 15 days salary for every completed year of service. Fraction of a year more than 6 months shall be taken as one year. In addition to the above, one month notice is also required to be given to each employee. In case no notice is given, the employees should be paid one month salary in lieu of notice. This will be two months in case there is a closure of establishment. Again, in the case of an establishment employing more than 100 employees, the notice pay is three months.

In addition to the above, each employee who has worked for 5 years or otherwise eligible for gratuity should get gratuity at the prescribed rate of 15 days salary for every competed year of service.


From India, Kannur

Dear Mr.Madhu.T.K,

Please clarify my following doubts

My company has taken civil contract from X X X X X company for constructing boundary wall. That X X X X X company already issued form V to our company to get licence under contract labour regulation and abolition act 1970. Our company applied for licence through Form IV. And also our company is asking me to get registration of establishment under Buildings and Other Construction Workers (Regulation Of Employment And Conditions Of Service) Act, 1996 through FORM-I (See Rule 23(1) ) Application for Registration of Establishments Employing Building Workers for that same workplace/site/location.

Now my doubt is

1. If we have taken licence under contract labour regulation and abolition act 1970 for one workplace/site/location, Is registration of establishment under Buildings and Other Construction Workers (Regulation Of Employment And Conditions Of Service) Act, 1996 required for that same workplace/site/location or not?

2.In that workplace/site/location, following designated employees are working

(i) Deputy Project manager,

(ii)Sr Engineer – Civil,

(iii)Jr Engineer-Civil,

(iv)Jr Surveyor,

(v)Civil supervisor and

(vi)Machine operator,

those peoples are getting approx. starting salary from Rs.10,000 to Rs.1,00,000 per month,

As per contract labour regulation and abolition act 1970 (CLRA),

who, being employed in a supervisory capacity draws wages exceeding five hundred rupees per mensem or exercises, either by the nature of the duties attached to the office or by reason of the powers vested in him, functions mainly of a managerial nature; and

who is employed mainly in a managerial or administrative capacity, those employees does not include in the workman meaning,

Now how can we maintain Statutory Compliances, and records under that CLRA act for that workplace/site/location.

In that workplace/site/location total employees strength is approx. above 40 workman on any day of the preceding twelve months.

Your immediate reply regarding above will be appreciated highly

Thanks with Regards


From India, Hyderabad

Thirumurugan has posted a question which has no relevance to the present discussion. Therefore, you are requested to post it as a separate thread by opening a new discussion giving a new subject title.

From India, Kannur

Dear Mr.Madhu.T.K,
Already discussion is going regarding my previously posted thread for you.
You may join on this discussion
Please click following link to go to that thread
we are welcoming your valuable reply regarding that thread.
Thanks with Regards

From India, Hyderabad

How to process the lay-off application? What is the period between notice display & application? what supportive document should attach with the application?
From India, Mumbai
dhiraj pandey
is it correct mostly company deducted employees salary 10% to 20% in lock down period. if correct then how to maintained wages register.
From India, Allahabad
Sandra Vasisht
Hi Everyone,
Please guide me the steps for Layoffs & Compliance that need to be kept in mind while deciding to layoff employees. Important links, docs & reports about this "Layoff in India" topic are highly required & would be a great help for me.

From India, Delhi

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