‘Mass layoffs illegal’: Employment Ministry

Union Minister of Labour and Employment, Bhupendra Yadav stated that as per the Industrial Disputes Act, firms and companies which operate with 100 employees or more have to seek permission from the government before implementing any kind of layoff or closure

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On 8 December 2022, during a Rajya Sabha session, the Labour and Employment Minister clarified that mass layoffs are illegal if the process of the terminations doesn’t fall under the provisions of the Industrial Disputes Act, and central and state-level governments can take action to protect the interest of the employees.

The statement comes after the question was raised in Rajya Sabha about how the government is going to tackle the mass lay-offs in IT, edu-tech, social media, and other larger multi-national companies. Bhupendra Yadav, the Labour and Employment Minister, replied by saying that any redundancy is illegal if not done as per the Industrial Disputes Act, of 1947.

Bhupendra Yadav also added that as per the Industrial Disputes Act, firms and companies which operate with 100 employees or more have to seek permission from the Government before implementing any kind of layoff or closure.

Following this statement, he also gave a clarification that the matter of laying off employees in the IT, edu-tech, startups, social media, and other related sectors of both Indian and multi-national companies, comes under the jurisdiction of the state-level government and is not governed by the Centre at all. No such data on laying off in the IT, edu-tech, startups, social media, and other related sectors are maintained by the Centre.

Based on this information, the redundancy and layoff of employees which is not carried out under the provisions of the Industrial Disputes Act will be considered illegal. Thus, the Central and state governments are entitled to take action to protect the interests of the employees.

As for the firms and companies that function under the jurisdiction of the Centre, the Central Industrial Relations Machinery is responsible to supervise these activities and secure the interest of the employees

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