It is due to some problems with the net work, the post could not be replied and do not think that you have put up a question which nobody could answer. First of all, lay off is not a subject of Factories Act but provisions relating to Lay off are laid down in Industrial Disputes Act. There are plenty of postings on lay off and retrenchments available in this site itself. An employer can go for lay off when there exists a situation of material shortage or power shortage. Employer' step to lay off will be acceptable when there arises such other reasons beyond the control of himself. He can declare lay off for the entire establishment or for a division of the establishment. During lay off days the workers who have been in continuous service for at least one year are to be paid lay off compensation @ 50% of the normal wages. However, no compensation shall be paid if such lay off is extended for a period beyond 45 days. For establishments employing 100 or more employees, prior permission from the government should be taken before laying off employees. Regards, Madhu.T.K