Minister on job cuts in IT and ed-tech: ‘Layoffs are deemed illegal if…’

Amid reports of mass layoffs by several firms, including in the IT and ed-tech sectors, Labour and Employment Minister Bhupender Yadav today said any retrenchment and layoffs are deemed to be illegal if not carried out as per the provisions of the Industrial Disputes Act.

The minister was replying in the Rajya Sabha to a question about whether the government has taken cognizance of the mass layoffs in various multi-national and Indian companies in the IT, social media, Edu Tech firms and related sectors.

“Matters relating to lay-off and retrenchment in industrial establishments are governed by the provisions of the Industrial Disputes Act, 1947 (ID Act) which also regulates various aspects of lay-off and conditions precedent to retrenchment of workmen. As per the ID Act, establishments employing 100 persons or more are required to seek prior permission of the appropriate Government before effecting closure, retrenchment or lay-off,” the minister said. 

“Further, any retrenchment and lay-off are deemed to be illegal which is not carried out as per the provisions of ID Act. ID Act also provides for right of workmen laid off and retrenched for compensation and it also contains provision for re-employment of retrenched workmen,” he added. 

The minister said that jurisdiction in the matters with regard to multi-national and Indian companies in the IT, social media, edu tech firms and related sectors lie with the respective state governments and no data is maintained at the central level on laying off and retrenchment with reference to IT, social media, Edu Tech firms and related sectors.

Based on their respective jurisdictions as demarcated in the ID Act, Central and State Governments take actions to address the issues of the workmen and protect their interests as per the provision of the Act, he said.

In the establishments that lie in the jurisdiction of Central Government, the minister said, the Central Industrial Relations Machinery (CIRM) is entrusted with the task of maintaining good Industrial relations and protect the interest of workers including on the matters relating to lay off and retrenchment and their prevention.