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What are your options if you are laid off during COVID-19 lockdown?

 As the world deals with COVID-19, the businesses around the globe are also facing various challenges. The lockdown being one of the most lucrative solutions to deal with the outbreak has also caused a substantial loss in revenues to the non-essential service providers due to the restricted movement and shutting down of non-essential services. As a result of this, various companies are laying off the staff to make up for the losses. Even though the government has asked the employers to not terminate their employees during the lockdown, what needs to be considered is whether the law can put such an obligation on the employers. Moreover, in a situation like this upon the termination of the job, the employees are also left thinking if they can challenge such termination or not.


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What are your options if you are laid off during COVID-19 quarantine?

As per the Indian law, there is no specific provision that deals with a situation wherein employers are obligated to not terminate its employees during a lockdown. However, the Industrial Disputes Act, 1947 talks about a similar situation. Under Section 2 (kkk) of the Industrial Disputes Act the term ‘lay off’ has been defined which states that when an employer is unable to provide employment to an employee due to a natural calamity or a similar situation the same would fall under ‘lay off’.


Subsequently, the Act also speaks about the terms on which an employee can be laid off. Under Section 25 C of the Act, the employers laying off workmen are required to pay compensation to the workmen being laid off which shall be equivalent to 50 percent of the wages. Moreover, the Act mandates any industrial establishment with more than 100 workmen to take prior permission before laying off the workmen. Although the permission is not mandatory if the laying off is due to a natural calamity.


However, the question again arises whether COVID-19 can be considered as a natural calamity. The Ministry of Finance through its notification dated 19th February 2020 has stated that the disruption of the supply chain due to the spread of novel COVID-19 will be considered as a natural calamity. Therefore, the workmen can take resort in the above-mentioned Sections on being laid off.


Although, for an employee who falls under the category of a ‘workman’, the conditions of service and termination are governed by the Industrial Disputes Act, 1947.  Section 2A of the Act provides that dismissal of an individual workman will be deemed to be an industrial dispute. As per the Act, the dispute such as this can be settled by way of conciliation or by adjudication and in case the matter is settled by conciliation, the dispute comes to an end.


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In case the dispute is not settled, it is referred to adjudication. The process of adjudication is as follows:


The dispute is referred to the Grievance Settlement Authority. In case the decision of Grievance Settlement Authority is not acceptable to the employer and/or the workmen, the appropriate government, by an order in writing, refers the dispute for adjudication to:


Board of Conciliation


Court for enquiry


Labour Court (if dispute pertains to matters specified in Second Schedule)


Tribunal (if dispute pertains to matters specified in Second or the third Schedule)


In case the employer and the workmen agree to refer the industrial dispute to arbitration, at any time before the industrial dispute has been referred under the Act to a Labour Court or Tribunal or National Tribunal.


For an employee who is a non-workman, their conditions of service are governed by the letter of appointment/ employment contract, issued by the employer and the Indian Contract Act, 1872 and the State-Specific Shops and Establishment Legislations as well as the various orders that have been issued by various departments of central and state governments during the lockdown. A non-workman may approach the civil court or the court designated under the Shops and Establishments legislation seeking payment of any unpaid dues or damages for wrongful termination if the termination was against the terms agreed by the employer earlier.


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How can a lawyer help?

In circumstances like these, if you are being laid off by your company or your salary is being deducted, it is necessary to understand as to what steps can be taken to retain your job or to get back the deducted salary. This is why it is important to have a labour lawyer by your side who can guide you with the right steps to be taken and help you in doing the needful to restore your rights. A labour lawyer, being an expert in the service sector laws, can help you understand the options available to you in situations like these and can also assist you with the necessary procedures in order to resolve your salary or job-related issue.

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