Cite.Co is a repository of information and resources created by industry seniors and experts sharing their real world insights. Join Network
Dear Seniors,
Our management has decided to close one of our factories. The factory has strength of 72 employees (Permanent - 9, Trainees - 19, Contract labours - 32, Management Staff - 12). Now, please guide me which Govt. bodies to be informed.
Also pls clarify:
1) since the strength of permanent worker + trainee = 28 only (12 months average strength is also less than 50). Should we inform the concerned authority - ACL.
2) If we have to give retrenchment compensation as per Sec 25F of ID ACT for closure, we have to calculate in gross wage. Am I right?
3) Apart from ACL of the concerned region, who are the other Govt. authorities to be informed.

From India, Madras
Dear Madhan,

Closing down a business is an aspect closely akin to the fundamental right to carry on any occupation, trade or business guaranteed under Art.19(1)(g) of our Constitution. However, the reasonableness and legality of the restrictions imposed under the provisions of the Industrial Disputes Act,1947 emanate from the human side of and the threat to economic development of the nation posed by the problem of closure of existing business enterprises. You can treat this observation as a preamble to my answers to your quries.

(1) The opening part of your thread leaves me to assume that your management is having several manufacturing units i.e factories and the intended closure is only in respect of a particular factory for reasons best known to the management.

(2) Though the employees' total strength and its break-up of the particular unit show that it is less than 100 to do away with obtaining prior permission from the Approp.Govt and less than 50 to do away with serving of 60 days notice before closure too respectively under sections 25-O and 25-FFA of the ID Act,1947, it is not discernible from your post whether there exists any functional integrality among the various units of the same management.

(3) The explanation given to each query makes the impression that you are thorough with the basic understanding of the provisions of retrenchment, closure etc.

Therefore, why not you try to negotiate with the workmen or their union regarding the possible alternative employment in other units of the management if they are willing or a decent separation package?

From India, Salem
This discussion thread is closed. If you want to continue this discussion or have a follow up question, please post it on the network.
Add the url of this thread if you want to cite this discussion.

About Us Advertise Contact Us
Privacy Policy Disclaimer Terms Of Service

All rights reserved @ 2020 Cite.Co™