8 Major Differences between Lay-Off and Retrenchment are mentioned below:
Lay-Off:
1. Section 2 (kkk) defines “Lay-off”.
ADVERTISEMENTS:
2. Lay-off is purely temporary.
3. In lay-off, the employer is compelled to refuse employment under certain circumstances, viz. shortage of raw materials, power, finance, etc., which arise temporarily in the industry.
Image Source: 185.26.182.219
4. Where the employer declares lay-off, the industry stops its function.
5. In lay-off, all the employees or a group of employees are refused to employment.
ADVERTISEMENTS:
6. The Conditions Precedent is not necessary in case of lay-off.
7. The laid-off employees are paid laid-off compensation. The payment of gratuity does not arise in lay-off.
8. All of the laid-off employees should be taken back in their usual posts, as soonas the lay-off lifted out.
Retrenchment:
1. Section 2 (oo) defines “Retrenchment”.
ADVERTISEMENTS:
2. Retrenchment is permanent. Of course, the re-appointment of retrenched persons is not bar at law. They may again be appointed in appropriate cases.
3. In retrenchment, the employer lessens over burdened employees under circumstance s, viz. Government policies, loss in some departments, etc.
4. While the process of retrenchment is going on, the industry does not stop its function. It continues to function.
5. In retrenchment, the last comes, first goes.
6. The Conditions Precedent are to be followed in case of retrenchment, viz. notice, retrenchment compensation, notice to Government in the prescribed manner, etc. (Sec. 25-F).
7. The retrenched employees are paid retrenchment compensation + payment of gratuity
8. Re-employment of retrenched workmen also takes place in certain circumstances. But it is, not mandatory that all the retrenched workers should be appointed. (Sec. 25-H)