A layoff is the suspension or termination of employment (with or without notice) by the employer or management. Layoffs are not caused by any fault of the employees but by reasons such as lack of work, cash, or material. A permanent layoff is called redundancy. It may happen to a displaced worker – one whose job has been eliminated because an employer has closed or relocated, or due to a production or work slowdown or cessation.
Layoff should be used in following situations:
- When a number of employees increases,
- At the time of temporary recession,
- Stoppage of work,
- Employee and employer negative relationship,
- For disciplinary actions,
- If a company cannot afford the cost because of low future productivity,
- If there is any indication of employee hazard, etc.