The original Industrial Disputes Act, 1947 (hereinafter “ID Act, 1947”) did not include provisions for compensation of layoffs. The Industrial Disputes (Amendment) Act, 1953 inserted the section. 25 A at Dry. 25 J of the present Chapter VA and the Second Amendment to the Industrial Disputes (Amendment) Act, 1976 incorporated Chapter VB into the ID Act, 1947 to overcome the difficulties arising from the absence of a uniform mechanism to decide the amount of compensation. The scope of this essay is to examine and determine whether layoff is a statutory right under the ID Act, 1947. The question of whether the ID Act, 1947 confers on the employer an inherent common law right to fire its employees was the purpose of this essay. challenge in two cases of the Supreme Court (hereinafter “SC”). The author will analyze both cases; Dewan Tea Estate v. Their management and workers of Firestone Tire and Rubber Company of India Ltd. c. The Firestone Tire and Rubber Company and critically judge their arguments to reach a conclusion. the respondents in this case argue that employers have an inherent right to terminate their employees pursuant to the authority conferred by the section. 25(C). The reason behind this argument was that if the company was successful, only compensation should be paid by the employer rather than paying the entire salary arrears. The Tribunal ruled that the dismissal was justified for two reasons. The reason for dismissal fell directly within the relevant Standing Order (hereinafter “SO”) and, therefore, the source of the authority to dismiss was justified. The Court held that even if the layoff is not justified by the SO, the employer had the right, at common law, to declare the layoff, as recognized by s. 25(C) of the ID Act, 194...... middle of paper ......d provisionH.H. Prince Azam Jha Bahadur v. Expenditure Tax Officer, Hyderabad [1972] AIR 2324 (SC); "The following guidelines in Canada as to when to use definitions in statutes appear to be fairly universal: Definitions should be used sparingly and only for the following purposes: a) establishing that a term is not used in its usual sense but in several meanings; b) to avoid excessive repetition, c) to allow the use of an abbreviation; d) to report the use of an unusual or new term. » In this regard, the author maintains that the definition is not a means of conferring a right or power on the employer to dismiss its employees. Ibid. Workmen v. Firestone Tire and Rubber Co of India (P) Ltd (n 5).MA Veiyra v. CP Fernandez [1956] 1 LLJ 547 (Bom).Workmen v. Firestone Tire and Rubber Co of India (P) Ltd (No. 12). Industrial Disputes Act, 1947.