What is closure, lockout, and strike in HRM? Provisions in detail

What is closure, lockout, and strike in HRM? Provisions in detail

It is imperative for business associations and employees to understand the meaning and consequences of closure, lockout, and strike on HRM as all the three actions have their own significant and very powerful effect over both the workers/labors and the establishment if not executed correctly.

What is Lockout in HRM?

Lockout in HRM is an action of briefly shutting down the work in a company without actually closing down the operation of/in the establishment. Often initiated by the administration of the organization, it involves denying employees' employment and refusal of admitting workers to work, generally by issuing a notice of lockout 6 weeks prior to the execution of the action.

During the lockout, workers are refrained from entering the premises of the factory and could face fine or prosecution if refused to abide. This action often tends to lead to a labor movement and political/ government involvement.


Cause of Lockout

There are many causes as to why the management of a factory decides to initiate the lockout. Generally, the following factors prompt employers to create a lockout:

  • Due to internal and external disputes in the company
  • Due to a financial crisis or economic recession
  • When workers refuse to comply with the new terms/ policies enforced upon them by the management, which affect their earning and benefits
  • Due to a falling-out between the workers union and the company's management
  • When the organization is caught in illegal and fraudulent practices

What is Strike in HRM?

A strike is a labor movement conducted by the trade union workers or the worker associations in a company to force the management of the organization to accept and fulfill their demands or necessitates.

During a strike, mass groups of employees temporarily quit working and take to the street or stay within the factory premises to express their grievance or lay down demands, which need to be met. This ultimately affects the revenue of the company.

Cause of Strike

The aspects that prompt workers to go on a strike depends on various scenarios and situations. Typically, laborers take the street for the following reasons:

  • Retrenchment and layoff of workers
  • Foresight over the closure of the establishment
  • A disagreement between the union workers and the management
  • Withdrawal of benefits/ bonuses/ gratuity/ privileges of workers
  • Reduction in salary wages and incentives
  • Immoral treatment of employees

What is Closure in HRM?

The closure is an immediate action executed by the management of a company during unexpected circumstances and emergencies. It involves temporarily closing a part of division/ sector or the entire factory/ plant to contain the situation. During this action, the company suspends all the work, without any formal notice, temporarily or permanently depending upon the situation.

date  01 Jun 2019

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