Compensation to Employess in case of factory layoff or closer

VBN

Hi All,
Our factory is planning to go for layoff / closer in near future.
It is a manufacturing unit and situated in U.P. It is a good profit making unit till now.
It has more than 150 direct employees and 85 indirect employees (out of 85 Indirect employees there are 40 approx. in managerial position)
Layoff / closer is decided due to some strategic decision by Top Management.
I wanted to know in such case, how all employee can be compensated. mostly are working here since more than 10 years.
I wanted to know that how the Laws can provide us benefit .
Looking forward to your valuable suggestion & answer .
Thanks & Regards,
Vikram Bhagat

VBN

umakanthan53

Dear Vikram,
From your post, I infer that there are more than 100workmen on the rolls of your manufacturing unit during the past 12 month's period. As such Chapter V-B of the ID Act, 1947 is applicable to your establishment. Therefore it is mandatory to get prior permission from the appropriate Government for lay-off, retrenchment of the workmen and closure of the undertaking.
It's a very cumbersome process as no popular Government would accord permission due to fear of criticism. Moreover, just because of certain losses in a particular year, it would not be justifiable to accord permission for lay-off or closure to a going concern.
Therefore, my suggestion would be to go in for some VRS on mutually agreed norms and terms.

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