Lay off
Important features :
1) An employee in an industry is said to be laid off if he/she reports to work on the given time and is not provided with any work by the employer within two hours of reporting.
2) Lay off is temporary in nature. Unlike retrenchment which is permanent.
3) Lay off can be done due to various reasons such as natural calamity, accident, shortage of raw materials, shortage of working capital etc.
4) Lay off can be done either for the full day or for a particular half of the working day. Eg : an employee can be laid off for the morning work session but can be employed for the afternoon session and vice versa.
5) It has been held in decided cases that an employee is not entitled for compensation if he/she does not accept alternative employment which is given within the 5 km radius of the existing workplace.
6) If shortage is caused by strike happening in another department of the industry then again the employees are not entitled for a compensation for the period laid off and also if an employee does not report to work within the alloted period he shall not be entitled for compensation.
7) An employee is entitled to 50% of pay as compensation during the period laid off.
8) A casual worker cannot be laid off.
9) For worked to be entitled for compensation he/she must have name entered in the muster rolls and also must have continuous service in the industry.
Retrenchment
1) An employee who is terminated from his/her employment for any reason other than termination as a form of punishment by the employer is said to be retrenched.
2) Every retrenched employee is entitled for compensation.
3) Following does not amount to retrenchment:
a) Voluntary retirement.
b) Super annuation.
c) Retirement due to illness.
d) Result of non renewal of contract of employment between employer and employee.
4) Following are conditions precedent to retrenchment:
a) Notice to employee.
b) Compensation.
c) Permission of appropriate authority.
d) Continuous service.
5) Usuall in retrenchment a policy of first comes first goes is used. That is an employee who joins the industry first is retrenched first and only the others are retrenched based on seniority.
