What is Layoff and Retrenchment?

Posted on 16th Jul 2018 | 1023 views

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Difference between layoff and retrenchment:

Difference between layoff and retrenchment is that retrenchment is non-volatile in nature that involves full and final termination of services whereas layoff is volatile in nature, i.e. employees are called to rejoin, once the period of layoff is over. Retrenchment is nothing but downscaling. The organization decreases outgoing expenditures or money or redirects focus in an attempt to become more monetarily solvent. It is the general approach of downsizing and cutting back. Lay off is termination, stoppage, inability or refusal of the employer due to a shortage of raw materials or breakdown of machinery or natural disaster or for any other related reason to give employment to an employee whose name is borne on the congregate rolls of his industrialized establishment and who has not been cut back.

Difference between layoff and retrenchment

Layoff and retrenchment:

Layoff and retrenchment both methods are used by employers to reduce their staff due to heavy expenditure, corporation defaulter etc. In these two methods employees are terminated but the difference between these two is that in a layoff, employees are terminated without any promise after paying all their legal dues but in retrenched employees are promised lawfully that they will be called back on the job when all the conditions of the company get better. Many people use Layoff and retrenchment synonymously, but we should consider them as separate terms. A corporate retrenchment may lead to layoffs; the organization may find ways to stay away from losing employees and still decrease expenses. The decision is in general driven by the organization's long-term goals and existing financial situation. If your organization is overstaffed in one field of operations and short-staffed in another, you can offer capable employees the opportunity to apply for jobs in the short-staffed area. If you are closing a locality, you may be able to suggest the employees to transfer to a different region.

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