Is a lock-out the same as a lay-off?

No. A lock-out is a closure by the employer; a lay-off is temporary inability to employ while business continues under Section 2(kkk).

Does Section 2(kkk) cover lock-outs?

No. Section 2(kkk) defines lay-off. The Supreme Court said lock-outs cannot be treated as lay-offs under this section.

When is compensation payable?

Lay-off compensation applies only to lay-offs. For lock-outs, liability depends on whether the lock-out was legal and justified.

What happened in Kairbetta Estate?

Violence led the employer to close a division (lock-out). The Court held it was not a lay-off; lay-off compensation rules did not apply.

Kairbetta Estate v Rajamanickam (AIR 1960 SC 893)

Quick Summary

The Court drew a clear line: lock-out ≠ lay-off. A lay-off (Section 2(kkk)) happens when business continues but the employer cannot give work for listed reasons. A lock-out is the employer closing the unit and keeping all workers out, usually due to an industrial dispute. Lay-off compensation rules do not apply to lock-outs.

Issues

Does a lock-out fall within Section 2(kkk) which defines “lay-off”?
Are the workmen entitled to lay-off compensation for the closed period?

Rules

Different concepts: Lock-out and lay-off are not the same; they have distinct triggers and effects.
Section 2(kkk): Applies to lay-off only—temporary non-employment while business continues, due to listed causes.
Compensation: Lay-off compensation provisions do not apply to a lock-out; lock-out liability depends on whether it was legal and justified.

Facts (Timeline)

Assault: Estate Manager was violently attacked by some workmen; suffered multiple fractures; hospitalized.

Threats: Staff at Kelso Division reported intimidation by workmen.

Closure notice: Employer announced closure of Kelso Division “until further notice.”

Conciliation: After assurances by workmen, the division was reopened through labour-office conciliation.

Claim: Workmen sought lay-off compensation for 28 Jul–2 Sep 1957 and filed a complaint under Section 33A for reinstatement/back wages.

Labour Court: Allowed lay-off compensation. Employer appealed to the Supreme Court.

Timeline of closure and claims in Kairbetta Estate v Rajamanickam

Arguments

Workmen (Respondents)

Closure period should be treated like lay-off; pay compensation.
Workers were ready to work; employer prevented entry.

Employer (Appellant)

This was a lock-out/closure triggered by violence and threats, not a lay-off under Section 2(kkk).
Lay-off compensation provisions are inapplicable to lock-outs.

Judgment

The Supreme Court held that lock-out and lay-off are entirely different. A lock-out is a closure; a lay-off is temporary non-employment in a continuing business for statutory reasons.

Lay-off compensation provisions do not apply to lock-outs.
For lock-outs, the employer’s liability depends on whether the lock-out was legal and justified, not on lay-off rules.

Judgment visual: Lock-out ≠ Lay-off; compensation rules differ

Ratio Decidendi

A closure that qualifies as a lock-out under the Act cannot be re-labeled as a lay-off under Section 2(kkk). Each concept has its own legal test and consequences.

Why It Matters

Prevents misuse of lay-off compensation rules in closure/lock-out situations.
Guides employers and tribunals to apply the correct statutory scheme.
Clarifies worker remedies: lock-out claims hinge on legality/justification, not Section 2(kkk).

Key Takeaways

Point	Quick Note
Concept split	Lock-out (closure) is not lay-off (temporary non-employment in ongoing business).
Section 2(kkk) limited	Applies only to listed lay-off causes; cannot cover lock-outs.
Compensation path	Lay-off compensation not payable for lock-out; check legality/justification instead.

Mnemonic + 3-Step Hook

Mnemonic: “LOCKED DOORS ≠ LACK OF WORK” — Locked doors mean lock-out; lack of work means lay-off.

Ask: Was the business closed or still running?
Match: Closure → lock-out; Running + listed causes → lay-off.
Apply: Use the correct remedy: compensation rules for lay-off; legality test for lock-out.

IRAC Outline

Issue: Does a lock-out come within Section 2(kkk) lay-off, and is compensation payable?

Rule: Lock-out and lay-off are different; 2(kkk) covers only lay-off in a running business for specified reasons.

Application: The division was closed due to violence/threats → a lock-out, not a lay-off.

Conclusion: Lay-off compensation not applicable; liability turns on legality/justification of lock-out.

Glossary

Lay-off: Temporary non-employment due to listed reasons while business continues (Section 2(kkk)).
Lock-out: Closure by employer keeping workers out during an industrial dispute.
Section 33A: Allows complaints to Labour Court during pending disputes about unfair acts.

FAQs

No. They are distinct in law. A lock-out is a closure; lay-off keeps the business running but without work for some workers.

They test whether the lock-out was legal and justified. Lay-off compensation rules are not applied.

It treated the closure period like a lay-off. The Supreme Court corrected this and separated the two concepts.

Ask: Was the unit closed (lock-out) or open but unable to give work for statutory reasons (lay-off)? Apply the matching legal scheme.

Case Meta

CASE_TITLE	KAIRBETTA ESTATE V. RAJAMANICKAM (AIR 1960 SC 893)
PRIMARY_KEYWORDS	lock-out; lay-off; Section 2(kkk); Industrial Disputes Act; compensation; closure
SECONDARY_KEYWORDS	industrial dispute; Labour Court; Section 33A; conciliation; employer liability
PUBLISH_DATE	23 Oct 2025
AUTHOR_NAME	Gulzar Hashmi
LOCATION	India
Slug	kairbetta-estate-v-rajamanickam-air-1960-sc-893