Lay off during COVID–19- The COVID–19 pandemic has caused an unprecedented human and health crisis. The measures necessary to contain the virus has triggered an economic downfall.[1]
Introduction
The current situation of the total halt of all kinds of commercial activities has emerged due to COVID–19 pandemic in the entire world. No country has remained unaffected due to this situation. It has impacted every industry of the country deeply. This has forced the industries and companies to take harsh decisions for their survival as they were left with no option but to reduce in production, procuring raw material at a higher cost, market competition due to low demand etc.
Companies had to reduce the manpower to keep their work continuation. A Lay – off is a temporary suspension or permanent termination of employment of an employee or a group of employees during this pandemic by the industries and companies. Laid off of employees are those employees who have lost or left their jobs because their employer has closed or moved also includes lack of work for them to do. It usually takes place as cost-cutting measures by various organizations to help them from the downfall.
Lay off laws in India
According to section 25C[2] of Industry and Dispute act 1947, Employer can lay off for a maximum period of 45 days only and employee who has been laid off is entitled to compensation of at least 50% of the total wages by the employer. The Employer is bound to pay to lay off compensation to the employee without any work done by him. This becomes a matter of serious concern for the employee also would be losing 50% of his wage which he would have earned if he was not been laid – off.
The Employer for any industrial establishments where not less than 100 workers are been employed, have to seek prior permission from the competent authority before lay – off workmen. If the employer does not apply for the permission or where such permission gets refused by the competent authority, such lay – off shall be considered as illegal and the workmen would be entitled to all the benefits as if they have not been laid – off.
Lay off during COVID–19
The Nationwide lockdown has been the Government strategy to combat COVID -19 pandemic. The National Disaster Management Authority (NDMA) was been set up, for issuing directions to take preventive measures for the safety of COVID – 19. There is a rise of companies and small businesses being forced to shut their doors temporarily or permanently. People who have been laid – off during this ongoing pandemic has to suffer a lot of problems mentally and even financially. This has resulted in a major downfall of the economy. Unemployed people will have to face a lot of difficult situations during this period because there is a lack of work and finance in our country. But this can be an opportunity for the laid-off employees to shift their perspective and showcase their potential and skills and improve their livelihood.
Sources:
[1] https://blogs.imf.org/2020/04/14/covid-19-crisis-poses-threat-to-financial-stability/ (IMF Blog).
[2] Right of workmen laid-off for compensation.
This blog is written by Sarthak Batra, Fairfield Institute of Management & Technology.
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