The closure of Hospital has to be dealt under the ID Act. These are my suggestions-
1. Try to introduce a VRS, under which whoever willing can avail the benefits under this scheme and will be treated as voluntarily retired. In respect of contract labour you have to issue adequate notice to the contractor reg.proposed closure;
2. Rest will have to be issued advance notice termination with required compensation as per ID Act. Consult the Labour Dept. for taking adequate steps.
3. Parallelly file application with the state govt.(Labour & Director of Industries/Health Dept.)for approval for termination & closure of hospital;
4. Once the formal approval is received rest of the compliance can take place.
5. You may engage an able advocate for compliance of all these procedures.
Some of the relevant provisions & procedures under ID Act is discussed in the attachment.