Layoffs and firing of employees declared illegal in India

by Subhechcha Ganguly

On Thursday, Labour and Employment Minister Bhupender Yadav warned any retrenchment and layoffs are deemed to be illegal if not carried out in accordance with the rules of the Industrial Disputes Act, amid allegations of mass layoffs by numerous companies throughout the world, especially in the IT sector.

The minister was responding to a question in the Rajya Sabha on whether the government was aware of the widespread layoffs occurring in several multinational and Indian businesses in the IT, social media, Edu Tech, and related sectors.

Importantly, the Act mandates that businesses with more than 100 employees must request approval from the relevant authorities before terminating workers. Over 100 people work for the majority of firms that have let go of staff, including Byju’s, Unacademy, Vedantu, Ola, and Oyo Rooms.In response to a question in the Rajya Sabha, Yadav stated that issues relating to layoffs and retrenchment in industrial establishments are governed by the provisions of the Industrial Disputes Act, 1947 (ID Act), which also regulates various aspects of layoffs and conditions precedent to retrenchment of workmen.

Additionally, he stated that no information on layoffs and retrenchments related to these sectors is kept at the central level.According to the minister, the Central Industrial Relations Machinery (CIRM) is tasked with maintaining positive industrial relations and defending the interests of workers in establishments under the control of the central government, including in matters relating to layoffs and retrenchments and their prevention.

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