Navigating Indian HR Layoff Policies: What Are My Rights and Compensation?

I work for a UK-based company headquartered in the UK and an Indian entity. The Indian entity is only about 7 months old, though I have been their sole representative in India for the last 2.5 years. They expanded operations in India in September 2013. Recently, due to their restructuring plans, they have laid off 4 employees in the UK and one in India—me (all women, I might add, though I don't know if this is of any relevance).

I wonder if you could please let me know what the Indian HR policy guidelines and my compensation entitlements for layoff are? This would be a huge help to me as I am a middle-aged woman who needs to fend for herself, and it's not easy to get a job at this level.

Industrial Dispute Act 1947: Lay Off & Retrenchment

Please go through the Industrial Dispute Act 1947, Chapter V-A, Section 25, "Lay Off & Retrenchment."

Regards,
R K Singh

I am sorry to say that you have furnished incomplete inputs for the proper examination of your case. Please always remember that a doctor can treat patients properly when he gets complete details of the illness. You have not mentioned the type of organization or nature of its activities, the number of persons employed, etc. However, I shall try to deal with the general provisions regulating the Lay-Off and Retrenchment.

Industrial Disputes Act, 1947: Lay-Off and Retrenchment

There are two chapters dealing with lay-off and retrenchment, namely Chapter VA and Chapter VB under the Industrial Disputes Act, 1947. The application of Section 25A under Chapter VA is extended to:
- Industrial establishments in which fewer than fifty workmen on average per working day have been employed in the preceding calendar month; or
- Industrial establishments which are of a seasonal character or in which work is performed only intermittently.

Similarly, the application of Section 25K under Chapter VB is extended to an industrial establishment (not being an establishment of a seasonal character or in which work is performed only intermittently) in which not less than one hundred workmen were employed on an average per working day for the preceding twelve months.

Regards.

In continuation of my previous email, I would like to add that unlike Chapter VA, government permission is required under Chapter VB. Section 25C stipulates that whenever a workman, whose name is on the muster rolls of an industrial establishment and who has completed not less than one year of continuous service under an employer, is laid off, he shall be paid compensation equal to fifty percent of the total of the basic wages and dearness allowance that would have been payable to him had he not been laid off.

What I have explained above is in the Indian context, but I advise you to check the meaning of lay-off in the UK context. I hope that "laid-off" in the UK context does not mean termination of service.

Regards,
BS Kalsi
Member since Aug 2011

Hi, thank you for your response. My company is a subsidiary of a UK-based company located in India. It operates as a membership-led trade association similar to FICCI and CII in India, with a focus on promoting UK businesses in India. Currently, we have approximately 10 full-time employees in India. I trust this information will assist you in providing a suitable response.

Regards,

I am sorry to say that you have furnished incomplete inputs for proper examination of your case. Please always remember that a doctor can treat patients properly when he gets complete details of the illness. You have not mentioned the type of organization or nature of its activities, the number of persons employed, etc. However, I shall try to deal with the general provisions regulating the Lay-Off and Retrenchment.

Chapters on Lay-Off and Retrenchment

There are two chapters dealing with the lay-off and retrenchment, namely Chapter VA and Chapter VB under the Industrial Disputes Act, 1947. The application of Section 25A under Chapter VA is extended to:
(a) industrial establishments in which fewer than fifty workmen on average per working day have been employed in the preceding calendar month; or
(b) industrial establishments which are of a seasonal character or in which work is performed only intermittently.

Similarly, the application of 25K under Chapter V-B is extended to an industrial establishment (not being an establishment of a seasonal character or in which work is performed only intermittently) in which not less than one hundred workmen were employed on average per working day for the preceding twelve months.

Many thanks for your response. My company is a subsidiary of a UK company and is based in India. It is a membership-led trade association along the lines of FICCI and CII in India. Their remit is to promote UK business in India. In India, the number of Full-Time Employees is about 10. Hope this will be sufficient information to help you respond.

Regards

Understanding Layoff Provisions Under the ID Act

Your establishment is not considered an industrial establishment as per the explanation under Section 25A of the Industrial Disputes Act. Therefore, the provisions of layoff under the Act do not apply to you. Layoff compensation depends on your contract of appointment.

Regards,
Varghese Mathew
[Phone Number Removed For Privacy Reasons]

In response to your further query, I wish to clarify that there may not be a mention of termination or redundancy in your contract, but I am sure that there must be a stipulation or clause regarding how you can leave the company and what the minimum notice period is for resignation or parting ways with the company. It cannot be a one-sided contract. Please go through the terms and conditions of the contract meticulously and proceed accordingly.

Regards,
BS Kalsi
Member since Aug 2011