Labour Law & Hr Consultant
Legal Consultancy
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We have 2 units of the same company. One in Bangalore and the other in Tumkur. The total strength of workmen in both units put together is less than 100 though the units are completely distinct and is not dependent on each other in any way. They have different factory registration. We are planning to close down one of the units due to prolonged labour problems. After closure can we appoint new workmen, other than those in the closed unit in the other unit. Is this permissible in law. Pl suggest. URGENT
2nd June 2016 From India, Bangalore
If there is no functional or financial interdependence on each other and if the workers were not transferred between these two units. You have to close the unit after following due process of law that is closure compensation, final dues etc. Are you going to employ additional workmen in the other unit? In addition to existing workmen ? You have no problem in employing more workmen in other unit, need not employ these workmen legally. But, as a good HR practice, if you can absorb some of them, it will add value to your IR.
3rd June 2016 From India, Pune
When there is no functional integrality between the two units, closure of one unit as per the provisions of law can not be a bar to the recruitment of new workmen to the functioning unit of the same management. However, since Bangaluru and Tumkur are situated not very far off from each other, some of the workmen of the to-be-closed unit may be interested in shifting to Bangaluru after settling their accounts. If the recruitment of new workmen to the other unit comes to the notice of the workmen likely to be affected, they may create some problems in the matter of closure and try to stall it. Therefore it would be better to negotiate with the workmen/trade union before closure about compensation and the possibility of rehabilitation to a certain no of people in the other unit as new entrants based on their suitability and requirement as well..
4th June 2016 From India, Salem
Though owned by the same individual or the same management, When the two establishments are separate legal entities there is no legal compulsion to give preference to the employees of the closed unit in the matter of new appointments to be made in the existing unit.
13th June 2016 From India, Salem
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