Facts of the Case
A workman was declared laid off by his employer due to non-availability of work in the factory. While returning home after the declaration of lay-off, the workman worked in another factory on the same day and received wages for that work. When the workman later claimed lay-off compensation from his original employer, the employer refused payment on the ground that the workman had earned wages elsewhere during the period of lay-off.
Issues in the Case
- Whether a workman is entitled to lay-off compensation if he earns wages elsewhere.
- Whether working in another factory during lay-off disqualifies the workman from compensation.
- Whether the employer’s refusal to pay lay-off compensation is legally valid.
Legal Principles Covered to Support Case Proceedings and Judgements
Under Section 25C of the Industrial Disputes Act, 1947, a laid-off workman is entitled to lay-off compensation. However, Section 25E clearly provides that a workman is not entitled to lay-off compensation if he accepts employment in another establishment during the lay-off period. The object of lay-off compensation is to provide relief for involuntary unemployment, not to allow double earnings. Courts have consistently upheld this statutory restriction.
Possible Judgement
The employer’s refusal to pay lay-off compensation is legally justified. Since the workman worked in another factory and received wages during the lay-off period, he is disqualified from claiming lay-off compensation under Section 25E of the Industrial Disputes Act, 1947. The claim of the workman is likely to be rejected.
About Lawgnan
Lay-off compensation rights depend on strict statutory conditions under Indian labour law. Accepting alternative employment during a lay-off period can directly affect eligibility for compensation. Both workmen and employers must clearly understand these legal provisions to avoid disputes and financial loss. If you are dealing with issues related to lay-off, retrenchment, compensation claims, or industrial disputes, timely legal clarity is essential. Visit lawgana.in to access expert legal insights, simplified explanations of labour laws, and professional guidance on employment disputes. Stay informed, ensure compliance, and protect your legal interests through trusted labour law resources.
