Definition of Layoff under the Industrial Dispute Act, 1947
Section 2(kkk) of the Industrial Dispute Act, 1947 defines layoff as "lay-off (with its grammatical variations and cognate expressions) means the:
- Failure, refusal, or inability of an employer
- On account of a shortage of coal, power, or raw materials, or the accumulation of stocks, or the breakdown of machinery, or natural calamity, or any other connected reasons
- To give employment to a workman whose name is borne on the muster rolls of his industrial establishment and who has not been retrenched.
Financial Stringency and Layoff Legality
Financial stringency is not a cause for which a layoff could be given. Therefore, any reason arising out of a financial crisis as a result of the current pandemic is absolutely irrelevant and is not a reason for which a layoff can be legally given. This fact has been substantiated by the honorable Madhya Pradesh High Court in the case of Hope Textiles Ltd vs State Of Madhya Pradesh.
Read full details on this judgment here: Layoff and Termination of Employment during Covid-19 Pandemic – Part 1 (Financial Crisis)
Section 2(kkk) of the Industrial Dispute Act, 1947 defines layoff as "lay-off (with its grammatical variations and cognate expressions) means the:
- Failure, refusal, or inability of an employer
- On account of a shortage of coal, power, or raw materials, or the accumulation of stocks, or the breakdown of machinery, or natural calamity, or any other connected reasons
- To give employment to a workman whose name is borne on the muster rolls of his industrial establishment and who has not been retrenched.
Financial Stringency and Layoff Legality
Financial stringency is not a cause for which a layoff could be given. Therefore, any reason arising out of a financial crisis as a result of the current pandemic is absolutely irrelevant and is not a reason for which a layoff can be legally given. This fact has been substantiated by the honorable Madhya Pradesh High Court in the case of Hope Textiles Ltd vs State Of Madhya Pradesh.
Read full details on this judgment here: Layoff and Termination of Employment during Covid-19 Pandemic – Part 1 (Financial Crisis)