Vinay B L (Company Secretary in Practice) 22 July 2011

Lay off without prior approval

Dear Members,

I have a query regarding Lay off. Section 25M of the Industrial Disputes Act, says prior approval of the appropriate authority is required for declaring lay off. But someone suggested me to go for layoff without approval.

If there is mutual agreement between labour union and the management, there is no requirement to take the prior approval is it? I went through a case law, wherein it is mentioned that the Company had not taken the approval of the appropriate authority and declared layoff. Then company had to pay full wages. For details please follow the below link:

https://www.thehindubusinessline.com/companies/article1599645.ece.

Kinldy provide the case laws or specific section where it is mentioned that the lay off can be declared with mutual understanding.

Thanks and Regards

Vinay B L

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Jai Karan Nagwan (consultant) 24 July 2011

Dear Vinay,

There are two set of provision for different set of industries. Chapter V-A & V-B. As per Chapter V-B, prior approval is mandatory, though there is arrangement between the union and employer. if there is arrangement, that can be filed with the application for approval, approval will be easily obtained. on the contrary matter can always be agitated and arrangement can not overrule to statutory provision under Section 25-M. However there is provision if approval or refusal is not received within a period of 60 days, that will be deemed as approval and lay off will be legal.

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