My factory in Alwar is planning a layoff, what compensation am I entitled to during the layoff period?

Detailed Legal Analysis

Layoff compensation is payable under the Industrial Disputes Act, 1947, read with the Rajasthan Rent Control Act 2001 rules, to workmen in factories employing 50 or more workers on any day in the preceding 12 months. You are entitled to layoff compensation equal to 50 percent of basic wages and dearness allowance for every day of layoff, subject to certain deductions.

The Rajasthan High Court has held that layoff cannot be a permanent arrangement, and the employer must either resume work or retrench with full compensation. The maximum period of layoff compensation is 45 days in a year, after which retrenchment procedure must be followed.

The employer in Alwar must apply for prior permission of the government if the factory employs 100 or more workers. Workers whose names appear on the muster roll but are not required to work are entitled to this compensation.