Hello, can anyone please guide me with the layoff process during COVID-19? I am looking for the following specific answers:
1. What is the process to lay off during COVID-19?
2. We are in huge loss. Do we need to pay one month's salary as severance pay to the employee?
3. How do we communicate this with the laid-off employees?
4. Is there a way we can send employees on indefinite leave until the lockdown is lifted and not pay them for those months, then hire them back once the lockdown is lifted?
5. If the answer is yes to the 4th question, then what would be the right process for it?
Thank you in advance!
From India
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11. What is the process to lay off during COVID-19?
2. We are in huge loss. Do we need to pay one month's salary as severance pay to the employee?
3. How do we communicate this with the laid-off employees?
4. Is there a way we can send employees on indefinite leave until the lockdown is lifted and not pay them for those months, then hire them back once the lockdown is lifted?
5. If the answer is yes to the 4th question, then what would be the right process for it?
Thank you in advance!
From India
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Dear HR-Kadmus,
The answers to your queries are given below:
1) Procedure to lay off:
The procedures for laying off any workman who has completed not less than one year of service as a regular workman in the establishment have been set out in the Industrial Disputes Act, 1947, u/s 25-C of Chapter V-A and u/s 25-M(1) of Chapter V-B respectively. If your establishment is a factory, mine, or plantation falling within Chap V-A, i.e., having less than 100 employees on average per day in the preceding 12 months, you can lay them off u/s 25-C due to COVID-19, which is a natural calamity, subject to the condition of payment of COMPENSATION for the days laid off other than intervening weekly holidays at the rate of 50% of the total wages comprising basic and D.A up to the first 45 days only. If your establishment comes under Chap-V-B with the total number of employees being 100 or more, you are normally required to obtain prior permission from the appropriate Government u/s 25-M(1). Since the outbreak of COVID-19 falls under the category of natural calamity, there is no need for such prior permission. However, the employer has to pay compensation as set down u/s 25-C(1) for the entire period without any limit. It is advisable to conduct a thorough study of the above-cited provisions for further clarification, if needed.
2) Since the COVID-19 outbreak is sudden and universal, without the excuse of practical reasons like continued financial losses or uncertainty of revival or legality of the directions, you have to comply with the directions of the Central and respective State Governments, including payment of one month's wages on humanitarian grounds.
3) Communication with the laid-off employees is not a problem at all. It can be done over the telephone or through publication in local newspapers.
4) No, the employer has no right to compel the employees to avail any leave on LOP.
I hope this information is helpful. Let me know if you need further assistance.
From India, Salem
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The answers to your queries are given below:
1) Procedure to lay off:
The procedures for laying off any workman who has completed not less than one year of service as a regular workman in the establishment have been set out in the Industrial Disputes Act, 1947, u/s 25-C of Chapter V-A and u/s 25-M(1) of Chapter V-B respectively. If your establishment is a factory, mine, or plantation falling within Chap V-A, i.e., having less than 100 employees on average per day in the preceding 12 months, you can lay them off u/s 25-C due to COVID-19, which is a natural calamity, subject to the condition of payment of COMPENSATION for the days laid off other than intervening weekly holidays at the rate of 50% of the total wages comprising basic and D.A up to the first 45 days only. If your establishment comes under Chap-V-B with the total number of employees being 100 or more, you are normally required to obtain prior permission from the appropriate Government u/s 25-M(1). Since the outbreak of COVID-19 falls under the category of natural calamity, there is no need for such prior permission. However, the employer has to pay compensation as set down u/s 25-C(1) for the entire period without any limit. It is advisable to conduct a thorough study of the above-cited provisions for further clarification, if needed.
2) Since the COVID-19 outbreak is sudden and universal, without the excuse of practical reasons like continued financial losses or uncertainty of revival or legality of the directions, you have to comply with the directions of the Central and respective State Governments, including payment of one month's wages on humanitarian grounds.
3) Communication with the laid-off employees is not a problem at all. It can be done over the telephone or through publication in local newspapers.
4) No, the employer has no right to compel the employees to avail any leave on LOP.
I hope this information is helpful. Let me know if you need further assistance.
From India, Salem
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