What is the entitled compensation to employee for closed company. - CiteHR
Umakanthan53
Labour Law & Hr Consultant

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Dear Team,
One of the leading corporate company suddenly accomplished their projects and have shutdown their site office.
What is the compensation to be given to the employees as per tamil nadu factory and labour acts.
Regards,
Lakshmi Narayanan
HR - Executive

Dear Lakshmi Narayanan,
I think that elaboration of your post with some vital information is required to answer your ultimate question pertaining to compensation in respect of the employees likely to face consequential job loss.
a) What is the nature of activities of the Company as a whole - manufacturing or mining or services?
b) What is the total no. of employees in the entire Company in the cadre of workman as defined under the I.D Act,1947?
c) The no. of workmen at the site to be closed.
d) Whether the workmen at the site were recruited and employed exclusively for the project of the site?
e) If so, whether it is a Fixed Term Contract of employment coterminous with the project and stood periodically renewed for obvious reasons?
f) Whatever it be, what is the average no of years of service rendered by such employees so far?
g) The possibilities of alternative employment by the Company to them elsewhere.

Dear Lakshmi Narayanan,
It is difficult say on face of your querry. To comment upon the matter needs lot more things as Mr Umakanthan asked for. You have mentioned that the company has shut down its project office. The word project is limited by time and having definite end period either can be completed early or extended further.
In roughly the workman does not liable for compensation as the project meets it end on completion of job. But things have to be seen from other angles which needs complete informations about the project. You are advised to consult any lawer deals in matter of labour in Tribunal or High Court, can guide you well in the matter.

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