Umakanthan53
Labour Law & Hr Consultant
Shivani Malik
Hr Executive
+1 Other

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Dear Fraternity, We are mid size IT company who were facing financial challenges and were planning for downsizing. Now the Corona Virus situation has further created a dent on revenues . Although it is not humane to go for lay offs in the current situation , i would like to understand the laws , litigations and compliance around it . Request your expertise.
Please help me to prepare a notice that no one can allowed till 31 march in the factory premises due to corona virus
Dear Ruchis,
It is too early to assess the extent of the damage likely to be caused by the outbreak and spread of the unprecedented Corona virus on Indian population and economy. The fear psychosis created by the epidemic resulting in self imposed curfews, skeletal means for commuting, absence of adequate preventive and curative health care facilities, the slowing down of the already struggling economy and the possibility of the global domino effect on the Indian manufacturing and service sectors certainly poses a gloomy near future.
In this murky scenario, of course, survival becomes the need of the hour for every industry. At the same time every employer resorting to right-sizing of his employee force out of insurmountable odds should not lose sight of the human side of the problem that the overall rate of unemployment is also to raise correspondingly.
Though the Industrial Disputes Act,1947 provides a remedy in the form of "retrenchment" as defined u/s 2(oo), it has got certain restrictions such as exit by the order of juniority i.e., last come-first go principle, notice and payment of compensation u/s 25F and obtaining prior permission of the appropriate Government u/s 25N when the employee strength is 100 or more in the preceding 12 months period. As right sizing of labor force does not mean mere reduction in the number, so statutory retrenchment will not enable the employer to have the choice of keeping the resourceful people retained.
Therefore, it is better to conduct a dispassionate study of man-power requirement over the next one or two years with the help of your functional heads and decide the excess number. Draw out a voluntary separation scheme with the help of your financial experts by making a comparative cost analysis of retention and exit of the excess people over the said period and decide the excess no department-wise. Start a consultative process with the trade union, if any or the workmen directly and enter into bilateral settlements u/s 18 of the IDA,1947. That will make the exit of excess people peaceful and avoid unnecessary litigation.

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