Navigating Layoffs: What Notices and Agreements Are Needed for a Small Company?

Dear Seniors,

Our company's employee strength is 80. However, we are going to lay off 17 workers. Could you please clarify the following: in the process of a layoff, do we need to issue a notice to the concerned workers stating our intention of the layoff? If yes, for how many months should the notice be given? Additionally, could you clarify whether workers who have not completed the one-year service period can be laid off or not? Do we need to execute an agreement of layoff with the concerned workers for a specific period?

Thanks in advance.

Rachna Mittal

If your organization is a factory, the prevailing industrial dispute/relations act and rules should be checked. Existing MOU with trade unions is also a matter of concern.

If you come under the Shops and Establishment Act, please ensure that the termination of employees does not violate any terms in the offer/appointment order and standing orders.

In both cases, it is a very sensitive and emotional matter, and I suggest handling it with utmost care.

Dear Rachna,

I think your query revolves around the "Lay-off" defined under Section 2(kkk) of the Industrial Disputes Act, 1947. Therefore, I would like to request you to go through Chapters V-A and V-B of the Act first and revert back if you still have any doubts.