To the Seniors,
What is the procedure for closing the department.
In our factory, different departments are there, we want to close the particular department from that unit due to profit.
The reason is, Producing the same product is costlier than other unit. (like salary,etc)
Kindly advice....
Regds....Mohan / 01.02.2015
From India, Chennai
What is the procedure for closing the department.
In our factory, different departments are there, we want to close the particular department from that unit due to profit.
The reason is, Producing the same product is costlier than other unit. (like salary,etc)
Kindly advice....
Regds....Mohan / 01.02.2015
From India, Chennai
Dear Mohan,
You could have given further information like what is your finished product, which department you would like to close, how many employees are working in that department, what is the total percentage of employees in that department against total employees working in the factory etc.
When you wish to close particular department, two options are available to manage the employees in that department. The first one is transferring them to some another department. This is possible provided they have potential to work in other department. Country like Japan is famous for making their workers versatile, hence their transfer to some other department becomes smooth.
Second one is to retrench them. However, this is little ticklish issue as we need to find out whether provisions of ID Act, 1947 become applicable.
Every product has a life cycle. Over a period of time, it becomes economically unviable to continue with few products. However, change in product line happens over a period of time. When you introduced some new product, that time itself you could have discontinued with this product. Probably your company did not give sufficient regard to product life cycle management.
Anyway, give sufficient information and then only it is possible to give further solutions.
Thanks,
Dinesh Divekar
From India, Bangalore
7855You could have given further information like what is your finished product, which department you would like to close, how many employees are working in that department, what is the total percentage of employees in that department against total employees working in the factory etc.
When you wish to close particular department, two options are available to manage the employees in that department. The first one is transferring them to some another department. This is possible provided they have potential to work in other department. Country like Japan is famous for making their workers versatile, hence their transfer to some other department becomes smooth.
Second one is to retrench them. However, this is little ticklish issue as we need to find out whether provisions of ID Act, 1947 become applicable.
Every product has a life cycle. Over a period of time, it becomes economically unviable to continue with few products. However, change in product line happens over a period of time. When you introduced some new product, that time itself you could have discontinued with this product. Probably your company did not give sufficient regard to product life cycle management.
Anyway, give sufficient information and then only it is possible to give further solutions.
Thanks,
Dinesh Divekar
From India, Bangalore
What you want to do is not allowed under I D act.
You can not remove some one just because his salary is high and you can get someone cheaper. Retrenchment has to be done on last in first out basis.
Shutting down a department can be done on specific reasons.
It making lower profit due to higher salary is definitely not one of them
Your best option is to offer a VRS to the workers.
Make it attractive enough so most of them will opt for it.
From India, Mumbai
You can not remove some one just because his salary is high and you can get someone cheaper. Retrenchment has to be done on last in first out basis.
Shutting down a department can be done on specific reasons.
It making lower profit due to higher salary is definitely not one of them
Your best option is to offer a VRS to the workers.
Make it attractive enough so most of them will opt for it.
From India, Mumbai
Closing down a particular department in a factory on the ground of unviability can not be a contentious issue as long as it does not result in loss of employment to the workmen employed therein. Redeployment of such people in other departments should be smooth and feasible as suggested by Dinesh. If it results otherwise in retrenchment of all or some of the workmen of that particular department, it would be a subject matter of industrial dispute not withstanding whether Chapters V-A or V-B of the Industrial Disputes Act,1947 is applicable or not and a pro-active approach is the best one as suggested by Saswata Bannerjee.
From India, Salem
From India, Salem
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Industrial Dispute Act.ppt