LAYOFF

NAME:PATEL PARTH S.
ID:19BBA088
 LAYOFF-Meaning

■ A layoff is a temporary separation of the employee from his or her employer

■ Layoff means failure, refusal or inability of an employer on account shortage of coal,
power or raw materials, or the accumulation of stocks, or the breakdown of
machinery or for any other reasons to give employment to workman, whose name is
borne on the muster rolls of his industrial establishment
Reasons for layoff

■ Decline in sales
■ Shortage of raw materials
■ Displacement caused by technology
■ Delay in production.
■ Accumulation of goods in the go down in large quantity.
■ Breakdown of machine.
 Procedure of Lay off
■ Employer has to provide a notice of the period of layoff within seven days
■ a) Refusal for employment of workmen can only be for reason specified in 2(kkk) of the
Standing Order.
■ b) The layoff should occur due to something beyond the control of the employer.
■ C) It should result in temporary non employment of workman whose name appears on
the muster rolls of the industrial establishment;
■ d) The employer expects that within a reasonable time, the industry would continue and
workmen will be restored their rights;
Procedure of Lay off

■ e) Layoff always occurs in a continuing concern, when the concern is closed for all time
to come, layoff has no relevance;
■ f)A layoff cannot be declared merely for the reason that the employer suffered financial
loss for reasons beyond his control, for such layoff should be unjustified and
invalid, too, and the workmen can claim full wages for the period of layoff.
 Compensation for layoff
■ A workman who is laid off is entitled to compensation equivalent to 50% of the total
basic wages and dearness allowance for the period of layoff.
■ His right of compensation is however, subject to the following conditions:
1. He is not a badli or casual workman.
2. His name should be borne on the muster rolls of the establishment.
3. He should have completed not less than one year of continuous service under the
employer.
Compensation of layoff
■ A workman is entitled to layoff compensation at the rate equal to fifty per cent of the
total of the basic wage and dearness allowance for the period of his layoff except for
weekly holidays which may intervene.
■ Compensation can normally be claimed for not more than forty five days during any
period of twelve months. Even if layoff exceeds forty five days during any period of
twelve months no compensation is required to be paid for the excess period if there
is an agreement to that effect between the workman and the employer.
■ If the period of layoff exceeds forty five days, the employer has two alternatives before
him. Namely
1. To go on paying layoff compensation for such subsequent periods,
2. To retrench the workman.
 Workman Not entitled to layoff
Compensation
■ No compensation is payable to the workman under the following circumstances
1. Where a workman refuses to accept any suitable alternative employment offered to him
by the employer. Such employment may be in the same establishment or in any
other establishment belonging to the same employer or in the same town or village
or at a place situates within a radius of 5 miles from the establishment to which he
belongs, which is of the same nature and which carries same wages
2. Where a workman, who has been laid off does not present himself for work at least
once a day at the appointed time during normal business hours
3. Where the laying off is due to a strike or slowing down of production by the workman
in another part of establishment.
A Three-Step Approach to Layoffs

■ Restructuring
■ Reselection
■ Deselection
Strategic Restructuring

■ Review efficiency of core functions

■ Project future demographics and skills
– Take steps to retain key people/skills
■ Maintain critical infrastructure
– e.g., many HR functions become more critical (e.g., outplacement, training)
Deselection

“Companies have become so proficient at the science of layoffs that many have
forgotten there’s an art to it”
Keys to Successful Layoffs
■ Involve all key players
– HR, Finance, Legal, Operations
– Including employee involvement
■ Establish objectives and timetable
– Plan for one major cut to meet objectives
■ Plan for costs
– Separation packages
– Lowered productivity in short term
– Effect of customer confidence
Keys to Successful Layoffs

■ Clear communication
– Early indications of problem
– Explain business justification—clarify it’s not employees’ fault
– Articulate new vision/direction
– Timetable and rationale for terminations
– Don’t forget the community
THANK YOU