Question About Transfer In Lieu Of Retrenchment

Hello. I have a unique question and would appreciate your answers:

A company XYZ has two business locations: Tamil Nadu and Uttar Pradesh. Its office in UP has the same set-up as the office in TN. The management has recently decided to retrench workmen in one particular department in the UP office. In essence, this particular department is scheduled to be closed down.

Now, as part of the retrenchment process, should the management be offering employment to the affected workmen in its TN office? Alternatively, should the management transfer these workmen to the TN office?

What are the legal conditions that govern this situation? Your feedback will be greatly appreciated.

Thanks,
Ajay.

Dear Ajay,

A lot will depend upon the employee's contract and the company's financial health. If necessary, it can transfer the employee or simply abolish the position, keeping in mind the law.

Shweta

If terms of appointment so provide, the employer can transfer the employees of the UP unit to the Tamil Nadu Unit. At the same time, if the unit is to be closed down, then provisions of the Industrial Disputes Act (mainly 25FFA and 25 FFF) will apply, and the employer should give at least sixty days' notice to the employees of the intention of the employer to close down the establishment. Similarly, a notice stating the closing should also be sent to the government. If the establishment employs 100 or more employees, mere notice is not sufficient, but approval by the government to close down the unit is required to be obtained before such closure. Above all, the employees retrenched should be given compensation at the rate of fifteen days' salary for every completed year of service.

Regards,
Madhu.T.K