Section 78: Prohibition of lay-off

Finin2min analysis — what the section actually does

Full statutory text — Section 78

78. Prohibition of lay-off.—(1) No worker (other than a badli worker or a casual worker) whose
name is borne on the muster rolls of an industrial establishment to which this Chapter applies shall be
laid-off by his employer except with the prior permission of the appropriate Government, obtained on
an application made in this behalf, unless such lay-off is due to shortage of power, natural calamity, and
in the case of a mine, such lay-off is due to fire, flood, excess of inflammable gas or explosion.
    (2) An application for permission under sub-section (1) shall be made by the employer electronically
or otherwise in the prescribed manner stating clearly the reasons for the intended lay-off and a copy of

such application shall also be served simultaneously on the workers concerned in such manner as may
be prescribed.
   (3) Where the workers (other than badli workers or casual workers) of industrial establishment,
being a mine, have been laid-off under sub-section (1) for reasons of fire, flood or excess of inflammable
gas or explosion, the employer, in relation to such establishment, shall, within a period of thirty days
from the date of commencement of such lay-off, apply, in such manner as may be prescribed, to the
appropriate Government for permission to continue the lay-off.
    (4) Where an application for permission under sub-section (1) or sub-section (3) has been made, the
appropriate Government, after making such enquiry as it thinks fit and after giving a reasonable
opportunity of being heard to the employer, the workers concerned and the persons interested in such
lay-off, may, having regard to the genuineness and adequacy of the reasons for such lay-off, the interests
of the workers and all other relevant factors, by order and for reasons to be recorded in writing, grant
or refuse to grant such permission and a copy of such order shall be communicated to the employer and
the workers.
    (5) Where an application for permission under sub-section (1) or sub-section (3) has been made and
the appropriate Government does not communicate the order granting or refusing to grant permission
to the employer within a period of sixty days from the date on which such application is made, the
permission applied for shall be deemed to have been granted as applied for on the expiration of the said
period of sixty days and the application shall be deemed to have been disposed of accordingly by the
appropriate Government.
    (6) An order of the appropriate Government granting or refusing to grant permission shall, subject
to the provisions of sub-section (7), be final and binding on all the parties concerned and shall remain
in force for one year from the date of such order.
   (7) The appropriate Government may, either on its own motion or on the application made by the
employer or any worker, review its order granting or refusing to grant permission under sub-section (4)
within the prescribed time from the date on which such order is made or refer the matter or, as the case
may be, cause it to be referred, to a Tribunal for adjudication:
  Provided that where a reference has been made to a Tribunal under this sub-section, it shall pass an
award within a period of thirty days from the date of such reference.
   (8) Where no application for permission under sub-section (1) is made, or where no application for
permission under sub-section (3) is made within the period specified therein, or where the permission
for any lay-off has been refused, such lay-off shall be deemed to be illegal from the date on which the
workers had been laid-off and the workers shall be entitled to all the benefits under any law for the time
being in force as if they had not been laid-off.
   (9) Notwithstanding anything contained in the foregoing provisions of this section, the appropriate
Government may, if it is satisfied that owing to such exceptional circumstances as accident in the
establishment or death of the employer or the like, it is necessary so to do, by order, direct that the
provisions of sub-section (1), or, as the case may be, sub-section (3) shall not apply in relation to such
establishment for such period as may be specified in the order.
   (10) The provisions of section 67 (other than the second proviso thereto) shall apply to cases of lay-
off referred to in this section.
  Explanation.—For the purposes of this section, a worker shall not be deemed to be laid-off by an
employer if such employer offers any alternative employment (which in the opinion of the employer

does not call for any special skill or previous experience and can be done by the worker) in the same
establishment from which he has been laid-off or in any other establishment belonging to the same
employer, situate in the same town or village, or situate within such distance from the establishment to
which he belongs that the transfer will not involve undue hardship to the worker having regard to the
facts and circumstances of his case, subject to the condition that the wages which would normally have
been paid to the worker are offered for the alternative appointment also.

How to apply this provision

1. Primary statutory test — (1) No worker (other than a badli worker or a casual worker) whose name is borne on the muster rolls of an industrial establishment to which this Chapter applies shall be laid-off by his employer except with the prior permission of the appropriate Government, obtained on an application made in this behalf, unless such lay-off is due to shortage of power, natural calamity, and in the case of a mine, such lay-off…
2. Additional operative limb — (2) An application for permission under sub-section (1) shall be made by the employer electronically or otherwise in the prescribed manner stating clearly the reasons for the intended lay-off and a copy of such application shall also be served simultaneously on the workers concerned in such manner as may be prescribed.
3. Qualification / exception to test — Provided that where a reference has been made to a Tribunal under this sub-section, it shall pass an award within a period of thirty days from the date of such reference.
4. Numerical or timing control — (3) Where the workers (other than badli workers or casual workers) of industrial establishment, being a mine, have been laid-off under sub-section (1) for reasons of fire, flood or excess of inflammable gas or explosion, the employer, in relation to such establishment, shall, within a period of thirty days from the date of commencement of such lay-off,…
5. Central Rule mapping — 30, 31, 32. Read the mapped provision together with this text rather than treating the concordance as a substitute for it.
6. Evidence file — retain facts and records proving the role/status of: Employer, Worker, Appropriate Government, Tribunal.

Rules, forms and cross-references

A direct concordance is not exhaustive. Central/State jurisdiction, schemes, authority appointments, saved instruments and later notifications may change the practical route without changing the section wording.

Worked example

Q&A — Section 78

Source & verification trail