Difference between closure and lockout: Labour Law

Difference between closure and lockout: Labour Law

by sangslegal.com

The term 'Closure' is outlined in Section 25 of the Industrial Dispute Act, 1947. It signifies the permanent discontinuation of operations in an industrial establishment. Simultaneously, 'Lockout' represents an employer's decision to shut down a workplace or suspend work, often in response to employee disputes. This action typically occurs when the employer chooses not to continue employing a specific subset of their staff. This concept is documented under Section 2(1) of the Industrial Dispute Act, 1947.

In both closure and lockout situations, the Deputy Labour Commissioner possesses a significant role. Closure is typically a result of unavoidable difficulties. Prior to this action, it is required to obtain the appropriate government's prior sanction. Should the Deputy Labour Commissioner instruct that a meeting should be arranged for a dignified agreement before the closure of the establishment, any previously made closure application can be withdrawn. Under such circumstances, this withdrawal will be deemed authentic and not fraudulent.(Sarv Shramik Sangathan Mumbai vs Government of Maharashtra AIR 2008 SC 946.)

The distinctions between closure and lockout are as follows:

1. A lockout refers to the temporary cessation of work in an industrial setting, on the other hand, closure signifies the permanent cessation of operations.
2. The employer initiates a lockout with the aim of coercing employees to either retreat from or lower their demands. The lockout functions as an arm of coercion in the employer's hands, while closure typically occurs due to uncontrollable circumstances.
3. Usually, workers do not receive compensation during a lockout, yet compensation is required in the event of a closure. This compensation is equivalent to the average salary for 15 days for every full year of service, replica borse and for any period exceeding six months.
4. The relationship between employer and worker remains intact in a lockout, whereas it ends in the event of a closure.
5. The employer is not required to provide notice in a lockout situation, while a notice is mandatory in a closure situation.
6. The appropriate government's prior sanction is not needed in a lockout scenario. However, when dealing with a closure application, the government's previous sanction is a prerequisite. A request for prior approval must be made at least 90 days in advance..