Can you tel me during company shutdown what are the procedures to be done by the HR for closing the PF and ESI, should we issue any certificate for the shutdown for the employees etc? Can you guide me through this ?
Ishwarya Velliangiri

From India, Chennai
Loginmiraclelogistics & Management)
Harsh Kumar Mehta
Consultant In Labour Laws/hr
Senior Hr -executive
+2 Others

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Dear Iswarya
Please Send the the Letter to Concern SSo And Pf Commissioner With Respect Esment Code: and make CC to IF/DCIF in case Manufacturing unit .
Please Show following Evidence to Them
1. Closing Electric Supply Doc
2.Bank Account
3.Machine Selling Document
Etc ...
you Must Intimate to Employee , If any one worked more than 5 years Means You should must pay gratuity ...

From India, Chennai
Harsh Kumar Mehta

1. The records of employers with reference to compliance under ESI Act, 1948 are maintained at the appropriate Regional/Sub/Divisional Offices of ESIC. Therefore, it is necessary that the correspondence in respect of temporary or permanent closure of the factory/unit should be sent to the appropriate office as mentioned above by indicating therein the Code Number and date of such closure. In case, intimation is not received by the appropriate authority, the dues can be assessed on adhoc basis under section 45-A/45-B of the said Act.
2. There may be some documents of closure of the unit viz.-sale deed, disconnection of electric meter, dissolution of firm etc. Therefore, copies of all such documents may also be sent alongwith letter as mentioned above.
3. There is no harm, if the copies of the letter are also sent to appropriate Social Security Officer / Branch Manager of ESIC.

From India, Noida

Thanks Venkat and Harsh Kumar Mehta for your valuable reply.
Can you also tel me how many months pay we should give for employees, is it depends on the company or any standard formalities?

From India, Chennai

Dear Iswarya Please Refer ID Act Sec 25 fff, it will Give clear Cut idea to you ...
From India, Chennai

Let me summarise your query as follows:

1. Procedures that HR has to follow w.r.t. employees, F & F settlement.

2. Procedures required with Labour Dept.

3. Requirements - others.-

I suggest steps as follows (with your inadequate information, to save time I straight away give these but you should ensure what is required by consulting authorities appropriately.)-

1) 1.i) First of all you should apply in the prescribed form seeking permission of the appropriate govt., labour dept. surrendering the regn.certificate issued by them. If ID Act is applicable you have to comply with the provisions of Sec.25 (o) pl.see attachment.

The minimum compensation required for settlement of employees are -

a) Retrenchment compensation: 15 days salary for every year of completed service

b) Gratuity: As per Gratuity Act or as per your applicable Gratuity rules.

c) Encashment of accumulated leave

d) Settlement of EPF or transfer formalities wherever applicable and other formalities as per Emp.Pension Fund, EDLI.

c) Any other funds/benefits accrued to them in case of cessation of employment.

There wouldn't be any payment from ESI. You may check with them whether these retrenched employees are eligible to avail treatment etc. till end of the contribution benefit period (say upto Oct'14/March.15)

2) i) It wouldn't be sufficient only by issuing letters to employees, EPO, ESI, PTO. You have to issue adv.notice individually to all the employees which have to be acknowledged by the concerned quoting the of the govt.approval.

ii) You have to file the Return ONLINE on the portal of EPO & ESI to close all the employee related data as required therein.

(Now a days EPO & ESI doesn't close the regn.of the employer only on receipt of a formal letter of closure, they also insist certified A/cs. and proof of closure of bank a/cs to support the completion of closure efforts. I am not sure whether authorities at Chennai insist all these at present).

3) Surrender of Excise Dept. & Service Tax, VAT regn. CoR have to be taken care of by your Finance/Accounts and/or Co.Secretary including formalities as required under the Companies Act, 1956.

From India, Bangalore

Pl.note the attachment.

Industrial Disputes Act, 1947:

"25-O. Procedure for closing down an undertaking.- (1) An employer who intends to close down an undertaking of an industrial establishment to which this Chapter applies shall, in the prescribed manner, apply, for prior permission at least ninety days before the date on which the intended closure is to become effective, to the appropriate Government, stating clearly the reasons for the intended closure of the undertaking and a copy of such application shall also be served simultaneously on the representatives of the workmen in the prescribed manner :

Provided that nothing in this sub-section shall apply to an undertaking set up for the construction of buildings, bridges, roads, canals, dams or for other construction work.

(2) Where an application for permission has been made under sub-section (1) the appropriate Government, after making such enquiry as it thinks fit and after giving a reasonable opportunity of being heard to the employer, the workmen and the persons interested in such closure may, having regard to the genuineness and adequacy of the reasons stated by the employer, the interests of the general public and all other relevant factors, by order and for reasons to be recorded in writing, grant or refuse to grant such permission and a copy of such order shall be communicated to the employer and the workmen.

(3) Where an application has been made under sub-section (1) and the appropriate Government does not communicate the order granting or refusing to grant permission to the employer within a period of sixty days from the date on which such application is made, the permission applied for shall be deemed to have been granted on the expiration of the said period of sixty days.

(4) An order of the appropriate Government granting or refusing to grant permission shall, subject to the provisions of sub-section (5), be final and binding on all the parties and shall remain in force for one year from the date of such order.

(5) The appropriate Government may, either on its own motion or on the application made by the employer or any workman, review its order granting or refusing to grant permission under sub-section (2) or refer the matter to a tribunal for adjudication : which the proceeding is pending for approval of the action taken by the employer.

(3) Notwithstanding anything contained in sub-section (2), no employer shall, during the pendency of any such proceeding in respect of an industrial dispute, take any action against any protected workman concerned in such dispute

(a) by altering, to the prejudice of such protected workman, the conditions of service applicable to him immediately before the commencement of such proceeding; or

(b) by discharging or punishing, whether by dismissal or otherwise, such protected workman, save with the express permission in writing of the authority before which the proceeding is pending.

Explanation - For the purposes of this sub-section, a "protected workman", in relation to an establishment, means a workman who, being a member of the executive or other office-bearer of a registered trade union connected with the establishment, is recognised as such in accordance with rules made in this behalf.

(4) In every establishment, the number of workmen to be recognised as protected workmen for the purposes of sub-section (3) shall be one per cent of the total number of workmen employed therein subject to a minimum number of five protected workmen and a maximum number of one hundred protected workmen and for the aforesaid purpose, the appropriate Government may make rules providing for the distribution of such protected workmen among various trade unions, if any, connected with the establishment and the manner in which the workmen may be chosen and recognised as protected workmen.

(5) Where an employer makes an application to a conciliation officer, Board, an arbitrator, a Labour Court, Tribunal or National Tribunal under the proviso to sub-section (2) for approval of the action taken by him, the authority concerned shall, without delay, hear such application and pass, within a period of three months from the date of receipt of such application, such order in relation thereto as it deems fit:

Provided that where any such authority considers it necessary or expedient so to do, it may, for reasons to be recorded in writing, extend such period by such further period as it may think fit:

Provided further that no proceedings before any such authority shall lapse merely on the ground that any period specified in this sub-section had expired without such proceedings being completed.

From India, Bangalore

To: Sr.CiteHR Members
Kindly give details for the following situation: Company XX employing more 100 workers in Bangalore want to Shift /Re-locate to another Factory/ shed in Bangalore at a distance of 60 KM from the existing Factory. I request S.rMembers to guide What are the steps tobe taken to comply with the relevants Acts, Rules, What Notices tobe issued/given to the employees, Labour Dept, Factory Inspectorate, Other authorities. Please give details with any format available. Kind Regards. 14.8.14

From India, Bangalore

Dear Khan,
You should furnish other relevant details like:
1. Whether same co. i.e. your Co.'XX' itselff relocate to a distant place en-mass or Co.'XX' is merging with some other existing Co. by vacating the present location. In other words are U trying to change your address, in 'as is where is' condition 'lock,stock & barrel' ?
2. Are you registered under the Factories Act or Shops & Commercial Estt. Act. ?
3. In which state you are (factory) located ?
4. Are you changing your Company's name and structure ?

From India, Bangalore

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