Umakanthan53
Labour Law & Hr Consultant
Madhu.T.K
Industrial Relations And Labour Laws
Saswatabanerjee
Partner - Risk Management
Harisinghbisht
Corporate Legal
+3 Others

We have a factory wherein less than 50 workmen are working. During the current fiscal, we don\'t have any orders as a result, we are unable to meet our fixed costs on month to month basis as a result we wish to declare lay off. Since, our workmen are less than 50, we need not to seek any permission from the Government for lay-off. My question is whether, the workers would remain without work during the lay-off or we can give them part work i.e., for 3 hours, 4 hours in a day since, we may not have work for the entire day for them, or we could get the maintenance work done during the lay-off period.
5th February 2015 From India, Bangalore
you need to check the rules in your state and the procedure specified in the state rules.
you are allowed total or partial layoff.
however, either a person is on layoff or he is working. it cant be half way.
So some of the persons can be working and some can be layed off.
But you cant give them half days work and lay off for half day.
One way is to give lay off on rolling basis so the payment for work gets distributed equitabely.
I hope seniors can confirm that for me.
6th February 2015 From India, Mumbai
Hi,
We have a factory wherein more than 300 workmen are working. The company is facing financial crises from last 6 months and the some of the units are not working, hence the workers have no work, can we declare lay-off in such case.
Is lay-off is allowed during financial crises or not.
7th February 2015 From India, Pune
A company wherein less than 50 workers are employed is not covered by the lay off provisions of the Industrial Disputes Act.Therefore, if you do not have any work, you can declare lay off without informing the Labour department but you should pay full wages during the lay off period. That means, the section 25C of ID Act which tells about payment of lay off compensation at the rate of 50% of wages is not applicable to establishments employing less than 50 workers. This does not mean that such small establishments can declare lay off without paying the lay off compensation of 50% wages but it should be construed that such organisations shall pay full wages in case they declare lay off as was decided in Workmen Vs Firestone Tyre & Rubber Co (1976(1)LLJ 493SC)
Therefore, it is good if you engage them on part time work at least for 3 or 4 hours a day.
Madhu.T.K
7th February 2015 From India, Kannur
Dear Mr Hari Singh,
I would give point wise reply as under:
1. You need not declare Lay-Off since your factory is employing less than 50 workers. Section 25A (1)(a) of ID Act, 1947 prescribes provisions of Lay-Off are not applicable to a factory employing less than 50 workers.
2. If your factory want to give work for half day you can do that by having a written understanding with the workers if employed directly by you or with the contractor through whom you are employing the workers.
3. If you stop the work and want to carry out the maintenance of machines, you can do that.
The only thing to be taken care of is that your contract letters given to workers or understanding made with them should be clearly written and accepted by the contractor/workers so that workers may not raise any issue at any subsequent stage.
8th February 2015 From India, New Delhi
I would like to draw Mr Srivasatav's attention to the case cited by me inn my reply and would like to reiterate that non applicability of section 25A (1) (a) to establishment employing less than 50 workers should be read as follows:
Section 25 C does not recognise a common law right to lay of his workmen. So the reason for lay off must be one contemplated by section 2(kkk) [ Workmen of Dewan Tea Estate Vs Management (AIR 1964 SC 1458)]. Financial difficulties is not a reason for lay off as per section 2(kkk)
If the number of workers is less below fifty section 25C will not apply. In the absence of service conditions and standing orders the employer has no right to lay off their workmen and in such cases the workmen would be entitled to their full wages for the period of lay off [ Workmen Vs Firestone Tyre & Rubber Co (1976 (1) LLJ 493SC)].
Madhu.T.K
9th February 2015 From India, Kannur
You are contradicting your own self. If you are able to provide for for = less than half day, then you can pay 60% of wages as minimum wages. You can't have lay-off and simultaneously offer part for part of day.
13th February 2015 From India, Mumbai
I am unable to find cotradiction, if any in Madhu's statements as suggested by Shrikanth. If we closely analyse the purpose, scheme and provisions of the Industrial Disputes Act,1947 we will come to the irrefutable conclusion that it is a piece of crisis-management industrial relations law imposing reasonable restrictions on the rights and responsibilities of both the employer and the employees to keep the wheels of employment moving even in harder times. The statutory restrictions on hiring and firing both temporary or otherwise are appropriate modifications of the existing contractual rights between the employer and the employees. In fact such restrictions are only reasonable concessions granted to establishments of larger employment strength to tide over the difficulties arising due to specific contingencies. In that point of view, establishments normally employing less no. of workmen has no right both statutorily and morally to do away with the smooth flow of employment in violation of the contract of employment.
19th February 2015 From India, Salem
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