In the Industrial Act of 1947, the definition of lay-off and provisions relating to lay-off have been made.

Lay-off is a less severe form of involuntary termination. It refers to a company’s decision to terminate an employee.

In lay-off, an employee who is laid off is separated from the pay roll for an indefinite period due to the factors beyond the control of the employer.

Involuntary discharge types include firing and laying off employees. When a company fires an employee, it generally stems from behavioral or performance issues on the worker’s part. A layoff means that the company doesn’t need you right now, but might at some point in the future.

When a company issues layoffs, It is usually not strictly related to personal performance, but due to economic cycles, economic instability to retain its position ie an employer generally faces economic hardships that cause it to go out of business, eliminate positions within the company or undergo restructuring. However, another reason for an employee layoff is the unsatisfactory completion of a new or current employee’s probationary period

eg a firm discontinues the production of a product thus the workers face a lay-off.

However, the employee can be called back in the foreseeable future when the circumstances become normal. In some cases, a laid-off employee may eventually be offered their old position again by his/her employer, though by this time they may have found a new job.

Lay-off involves a temperory or a permanent removal from the pay roll of the employees who are laid off.

Obviously the main purpose of a lay-off is to reduce the financial burden on the organization when its employees cannot be used profitably.

Section 2(kkk) of Industrial Disputes Act, 1947 defines lay-off and accordingly lay-off means the refusal, failure or inability of an employer to provide or to give employment to the workman whose name is borne on the muster rolls of his industrial establishment and who has not been retrenched.

Causes of lay-off

1] The accumulation of stocks.

2] The shortages of coal, power, fuel or raw materials.

3] The breakdown of machinery.

4] Natural calamity.

5] Production delays.

6] Any other connected reason.

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