Can anyone tell me what is the redundancy process in India? there are around 6 people working in India since last 20-24 years, our group company wishes to release them as the job which they were doing will happen in Bahrain through software.
19th September 2018 From India, Mumbai
Dear Leena,
In short, you want to shift the jobs done physically by the 6 people from/in India for the couple of decades to Bahrain to be done through software. Can we take it as the closing down of your entire operations in India or only dispensing with the services of the said six people as redundant?
Both the processes are covered by the provisions of the Industrial Disputes Act,1947.
The first one is defined as "closure" u/s 2(cc) of the Act thereby meaning the permanent closing down of a place of employment or a part thereof.
The second one is defined as "retrenchment" u/s 2(oo) of the Act. It means the termination of the employment of a workman by the employer for whatever reason other than dismissal for misconduct. It also excludes termination of employment by way of resignation or voluntary retirement by the employee, normal retirement due to reaching the predetermined age of superannuation by the employee, due to non-renewal of the contract of employment after its expiry or termination due to continued ill-health of the workman concerned.
Anyway, the the termination of the employment of the 6 people, if they are "workman" as defined u/s 2(s) of the Act, would fall under retrenchment.
Therefore, as their employer, you have to give notice or notice pay in lieu of notice and pay retrenchment compensation which shall be equivalent to 15 days' average pay for every completed year of continuous service or in any part thereof in excess of 6 months as per the provisions of sec.25-F of the Act. In addition, you have to pay them gratuity for the entire services rendered by them as per the provisions of the Payment of Gratuity Act,1972, if applicable to your establishment.
If your Indian operations involve 100 or more workmen, both for closure and retrenchment you will have to obtain prior permission from the appropriate Government under the Act.
Therefore it would be better to work out a voluntary separation scheme by initiating dialogue with the workmen and make the exit peaceful.
19th September 2018 From India, Salem
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