Abstract

Layoff provisions become relevant when developing any industrial establishment in India, particularly because most labour law legislation is pro-worker. Employers have the right to lay off workers, but they must use it carefully and in compliance with the relevant legal legislation. While the monetary punishment for breaching these laws is not serious, it may have a detrimental effect on the establishment's goodwill and prestige. Further, improper laying-off of workmen can lead to strikes and lock-outs, which can result in significant business loss for the establishment. Therefore, there is reason enough for every establishment in India to follow and adhere to labour legislations to ensure harmony amongst its workmen and facilitate smooth running of their business activities. Freedom of contract, an entrenched tenet of laissez faire, authorised an employer to discharge workmen whenever a breakdown of machinery, or a similar cause beyond the employer’s control, enforced a stoppage of work. This exposed workmen to intermittent but grave hazards of unemployment. The paper analyses the key concepts of lay-off, its development, qualifications to claim compensation, prohibitions and judicial developments upon the subject over the years. Further it throws light on layoff in pandemic time and The Industrial Relation Code, 2019.

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