Questions:
1. If a company is giving a layoff to their employees, will they be entitled to any monthly remuneration? If yes, if an employee is earning $10,000 per month, what will be the calculation?
2. At the time of layoff, can an employee claim VRS (Voluntary Retirement of Services)?
3. If the company is not providing any remuneration, what can be done? (They have a union)
From India, Mormugao
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51. If a company is giving a layoff to their employees, will they be entitled to any monthly remuneration? If yes, if an employee is earning $10,000 per month, what will be the calculation?
2. At the time of layoff, can an employee claim VRS (Voluntary Retirement of Services)?
3. If the company is not providing any remuneration, what can be done? (They have a union)
From India, Mormugao
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Hi Tushar,
1. The layoff payment will be 50% of the basic pay.
2. We can't take VRS when the company is in a layoff.
3. If the company is not providing the remuneration, meet with the consent labor department to file a written complaint or lodge a complaint through the union.
Regards
From India, Hyderabad
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1. The layoff payment will be 50% of the basic pay.
2. We can't take VRS when the company is in a layoff.
3. If the company is not providing the remuneration, meet with the consent labor department to file a written complaint or lodge a complaint through the union.
Regards
From India, Hyderabad
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First of all, in order to be considered a layoff, the temporary closure should be due to a shortage of coal, power, or raw materials, or the accumulation of stocks, or the breakdown of machinery, or a natural calamity, or for any other connected reason. Any reason not connected with the above will not fall within the purview of Section 2 (kkk) of the Industrial Disputes Act. Layoff compensation, as per Section 25C at the rate of 50% of salary, is available only to those who have worked for at least one year, and one year means paid working days (including paid holidays and leaves) of 240 days in the preceding 12 months. Layoff compensation is calculated based on basic wages and dearness allowances.
The layoff provisions are not applicable to an establishment employing less than 50 workers. It should not be construed that in such companies there is no need to pay any layoff compensation, but as per Workmen Vs Firestone Tyre and Rubber Co [1976 (1) LLJ 493 SC], the workmen in such establishments are entitled to full wages if they are laid off.
Layoff compensation is not available to workmen who refuse to accept alternative employment requiring the same skill and expertise in the same establishment or another establishment of the same employer within a radius of five miles.
If compensation legally payable is not paid, the same can be recovered by approaching the appropriate authorities.
Madhu.T.K
From India, Kannur
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The layoff provisions are not applicable to an establishment employing less than 50 workers. It should not be construed that in such companies there is no need to pay any layoff compensation, but as per Workmen Vs Firestone Tyre and Rubber Co [1976 (1) LLJ 493 SC], the workmen in such establishments are entitled to full wages if they are laid off.
Layoff compensation is not available to workmen who refuse to accept alternative employment requiring the same skill and expertise in the same establishment or another establishment of the same employer within a radius of five miles.
If compensation legally payable is not paid, the same can be recovered by approaching the appropriate authorities.
Madhu.T.K
From India, Kannur
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Dear Madhu sir, If alternative employmenet is accepted then can compensation for lay off and remuneration for alternative employment,be claim. Mangesh Wakodkar Aurangabad
From India, Pune
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From India, Pune
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Dear Tushar,
Mr. Madhu T.K. has very well explained the provisions relating to lay-off existing under the Industrial Disputes Act, 1947. As regards your subsequent query, it seems that you are not clear about the concept of lay-off. Lay-off is initiated by an employer when he is unable to provide employment to his workers. Once a worker accepts an alternative employment, then there is no question of lay-off compensation; rather, he will continue to receive the regular remuneration that he has been receiving earlier.
Best regards,
BS Kalsi
Member since Aug 2011
From India, Mumbai
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Mr. Madhu T.K. has very well explained the provisions relating to lay-off existing under the Industrial Disputes Act, 1947. As regards your subsequent query, it seems that you are not clear about the concept of lay-off. Lay-off is initiated by an employer when he is unable to provide employment to his workers. Once a worker accepts an alternative employment, then there is no question of lay-off compensation; rather, he will continue to receive the regular remuneration that he has been receiving earlier.
Best regards,
BS Kalsi
Member since Aug 2011
From India, Mumbai
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Dear Mr.Kalsi, I mean to say that alternative employment is offered from same employer. please clear. Mangesh Wakodkar Aurangabad
From India, Pune
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From India, Pune
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Dear Mangesh,
Yes, it has to be under the same employer. For your clarity, you may refer to Section 25E of the Industrial Disputes Act, 1947, which debars a workman from receiving compensation for lay-off in certain cases. Sub-section 25E (i) stipulates that if a workman refuses to accept any alternative employment in the same establishment from which he has been laid-off, or in any other establishment belonging to the same employer situated in the same town or village or within a radius of five miles from the establishment to which he belongs, if, in the opinion of the employer, such alternative employment does not call for any special skill or previous experience and can be done by the workman, provided that the wages which would normally have been paid to the workman are offered for the alternative employment also.
Hope the position is clear to you.
BS Kalsi
Member since Aug 2011
From India, Mumbai
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Yes, it has to be under the same employer. For your clarity, you may refer to Section 25E of the Industrial Disputes Act, 1947, which debars a workman from receiving compensation for lay-off in certain cases. Sub-section 25E (i) stipulates that if a workman refuses to accept any alternative employment in the same establishment from which he has been laid-off, or in any other establishment belonging to the same employer situated in the same town or village or within a radius of five miles from the establishment to which he belongs, if, in the opinion of the employer, such alternative employment does not call for any special skill or previous experience and can be done by the workman, provided that the wages which would normally have been paid to the workman are offered for the alternative employment also.
Hope the position is clear to you.
BS Kalsi
Member since Aug 2011
From India, Mumbai
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Dear Tushar,
The general provisions relating to lay-off have been explained by Sh. Madhu as well as by me in our earlier mails. However, I would like to answer your queries, which you have raised in your initial mail for your better understanding as under:
1. If a company is giving a lay-off to their employees, will they be entitled to any monthly remuneration? If yes, then if an employee is earning 10,000/month, what will be the calculation? If an employer is giving lay-off compensation to the employees, then they will not be entitled to receive any monthly remuneration. For answering your next query, you should have provided the bifurcation of Rs. 10,000. However, it is for your information that the lay-off compensation shall be equal to fifty per cent of the total of his basic wages and dearness allowance.
2. At the time of a lay-off, can an employee claim VRS (Voluntary Retirement of Services)? No, a workman cannot claim VRS suo motu, but if there is some scheme prevailing at that point of time, then of course, he is entitled to avail it.
3. If a company is not giving any remuneration, then what can be done? (They have a Union) If an employer is not giving any remuneration for the lay-off period and there is a union existing in the establishment, the union can espouse the cause of non-payment of lay-off compensation to its members and raise a dispute before the conciliation officer of the labor department.
BS Kalsi
Member since Aug 2011
From India, Mumbai
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The general provisions relating to lay-off have been explained by Sh. Madhu as well as by me in our earlier mails. However, I would like to answer your queries, which you have raised in your initial mail for your better understanding as under:
1. If a company is giving a lay-off to their employees, will they be entitled to any monthly remuneration? If yes, then if an employee is earning 10,000/month, what will be the calculation? If an employer is giving lay-off compensation to the employees, then they will not be entitled to receive any monthly remuneration. For answering your next query, you should have provided the bifurcation of Rs. 10,000. However, it is for your information that the lay-off compensation shall be equal to fifty per cent of the total of his basic wages and dearness allowance.
2. At the time of a lay-off, can an employee claim VRS (Voluntary Retirement of Services)? No, a workman cannot claim VRS suo motu, but if there is some scheme prevailing at that point of time, then of course, he is entitled to avail it.
3. If a company is not giving any remuneration, then what can be done? (They have a Union) If an employer is not giving any remuneration for the lay-off period and there is a union existing in the establishment, the union can espouse the cause of non-payment of lay-off compensation to its members and raise a dispute before the conciliation officer of the labor department.
BS Kalsi
Member since Aug 2011
From India, Mumbai
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