The Industrial Conflicts Act is the most important law dealing with the impact of layoffs in India. Prior to its passage, there was no law governing industrial layoffs and employers had a relatively unlimited prerogative to hire and lay off. The law has put in place restrictions and rules on the dismissal of surplus workers in the industry and now contains provisions on reductions and redundancies, as well as on the payment of compensation to workers in certain eventualities. If the majority of each party signs the arbitration agreement, the government may issue a notification that gives employers and workers who are not affected by the arbitration agreement but are involved in the dispute the opportunity to present their case to the arbitrator. Layoffs can also lead to the end of workers` services, not on an individual basis, but on a large scale. This form of collective dismissal occurs in the event of a permanent closure of a company or workplace by an employer. The closure may involve the permanent closure of all or part of the job. Since the effects of the termination of workers` services are much more serious than the dismissal of an individual worker, the Labour Disputes Act provides for a detailed procedure for an employer to follow with a view to closing a business or business place. The Labour Disputes Act stipulates that any employer who intends to close his business must give the relevant government a 60-day period of time, indicating the reasons for the proposed closure. Currently, the effects of redundancy provisions are contained in chapters V-A and V-B of the Act. These chapters cover layoffs, reductions, closures and transfers of a company. Industrial enterprises that are seasonal in nature or work only sporadically are not included in the protection of the two chapters.
A tripartite regulation refers to a scheme involving a third party or a foreigner, i.e. the conciliation committee or the conciliation delegate. As we have seen in Section 2, point p), the ON ID Act provides for a tripartite regime. There are also other provisions that explain the process in more detail. Under the Labour Disputes Act, the former employer is subject to the obligation to compensate in the event of a business transfer. However, this obligation may be transferred to the new employer if the transfer conditions provide for it and if the workers concerned consent to it. If a worker is dismissed for a period of 12 months for more than 45 days, no compensation is paid after the first 45 days if an agreement exists between the worker and the employer and, after 45 days, the employer is allowed to remove the worker at any time in accordance with the provisions of the law.  Section 2(p) “comparison”, an agreement reached as part of the conciliation procedure and contains a written agreement between the employer and staff that was not concluded as part of the conciliation procedure, if this agreement was signed by the parties in the prescribed manner and a copy of that agreement was forwarded to an authorized official on that behalf by the competent government and the conciliation officer. The Industrial Disputes Act of 1947 provides that any worker who has served a business immediately prior to the transfer to that company is entitled to notification and compensation immediately prior to the transfer if it is transferred from one employer to another, either by agreement or by law, as if the worker had been removed.