Can We Legally Hire New Workers in Our Other Unit After Closing One? Urgent Help Needed

We have two units of the same company, one in Bangalore and the other in Tumkur. The total strength of workmen in both units combined is less than 100, although the units are completely distinct and not dependent on each other in any way. They have different factory registrations. We are planning to close down one of the units due to prolonged labor problems.

After closure, can we appoint new workmen, other than those in the closed unit, in the other unit? Is this permissible by law? Please suggest. URGENT

Closure of a Unit and Employment of New Workmen

If there is no functional or financial interdependence between the two units and the workers have not been transferred between them, you must close the unit following the due process of law, which includes closure compensation, final dues, etc.

Are you planning to employ additional workmen in the other unit, in addition to the existing workmen? You have no legal issue employing more workmen in the other unit; you are not legally required to employ the workmen from the closed unit. However, as a good HR practice, absorbing some of them could add value to your industrial relations.

Regards

Recruitment After Unit Closure

When there is no functional integrality between the two units, the closure of one unit as per the provisions of law cannot be a bar to the recruitment of new workmen in the functioning unit of the same management.

However, since Bangalore and Tumkur are situated not very far from each other, some of the workmen from the unit to be closed may be interested in shifting to Bangalore after settling their accounts.

If the recruitment of new workmen to the other unit comes to the notice of the workmen likely to be affected, they may create some problems regarding the closure and try to stall it. Therefore, it would be better to negotiate with the workmen/trade union before closure about compensation and the possibility of rehabilitating a certain number of people in the other unit as new entrants based on their suitability and requirements.

Though owned by the same individual or the same management, when the two establishments are separate legal entities, there is no legal compulsion to give preference to the employees of the closed unit in the matter of new appointments to be made in the existing unit.