Navigating Re-employment After Lockdown: Do We Need to Rehire Laid-off Staff?

Due to the uncertainty surrounding the duration of the lockdown in the city where the establishment is situated and the restrictions on operating hours for the business, the establishment was closed, and all staff were laid off after receiving payment for all legitimate dues up to the day of closure. Their services were recorded as terminated in the PF account maintained by EPFO.

Re-employment Considerations After Lockdown

The question arises if the establishment is to be re-started after a certain period:

1. Is it necessary to re-employ the same staff or give them preference under any applicable law, and if so, under which Act?

2. If some of the previously laid-off employees are re-hired, will they be considered as new employees from the date of re-joining, or will their employment be viewed as a continuation of their past service? Additionally, how should the settlement amount paid to them in lieu of notice pay, encashment of leave salary, and gratuity be treated in this scenario?

Dear Jawahar,

With the insufficient information provided in your post, I think it will not be possible to give appropriate answers to the queries raised therein.

Better, you should provide the following additional details:

1) What is the type of your industry - a factory or another establishment?

2) What was the total number of employees on the roll during the preceding 12 months prior to closure on average?

3) Whether any notice under section 25-FFA of the ID Act, 1947, was issued, or formal permission for closure was obtained from the appropriate Government prior to closure?

4) Whether any industrial dispute was pending on non-payment of wages during the lockdown period at the time of closure?

5) How and from when the employees were said to have "left" after receiving all their "legitimate dues" - opted to resign under any scheme of VR or by making any bilateral settlement?

6) What is the breakup of "legitimate dues" paid to the workmen?

7) Whether the closure was genuine and total by surrendering the license, registration certificate, if any, and by clearing all debts due to banks and other financial institutions as well as all other creditors?

8) If not, is the so-called closure of the establishment a mere suspension of its operations only?

Please provide the necessary details for a more accurate response.

Thank you.

Your posting has been answered by our senior member, who raised some questions to provide you with a solution after receiving your feedback. Have you notified the authority under the Factory, Shops & Establishment Act that your establishment has been closed? Have you surrendered your EPF registration now that it has already been closed? Marking employees as "left" is not the correct procedure.

Have you paid the Full and Final (F&F) settlement to employees as required under the Industrial Disputes Act for the closure of the establishment?

1. It is not necessary to re-employ the same staff, but you can give preference as per the law regarding the closure of the establishment.
2. If some of the employees who left are re-employed, they will be treated as fresh employees from the date of rejoining.

In the absence of closure permission: The establishment accepts resignations of employees (at will). If an employee applies to the employer to settle their dues due to the uncertain running of the establishment and seeks other employment elsewhere, the employer should comply.

Hi, you should provide the following additional details:

1) Type of Industry
What is the type of your industry - a factory or other establishment?

2) Employee Count
What was the total number of employees on the roll during the preceding 12 months prior to closure on average?

3) Notice Under ID Act
Whether any notice under section 25-FFA of the ID Act, 1947, was issued or formal permission for closure was obtained from the appropriate Government prior to closure?

4) Pending Industrial Disputes
Whether any industrial dispute was pending due to non-payment of wages during the lockdown period at the time of closure?

5) Employee Departure
How and when did the employees "leave" after receiving all their "legitimate dues"? Did they opt to resign under any voluntary retirement scheme or through a bilateral settlement?

6) Breakup of Legitimate Dues
What is the breakup of "legitimate dues" paid to the workmen?

7) Genuine Closure
Whether the closure was genuine and total by surrendering the license, registration certificate, if any, and by clearing all debts due to banks, other financial institutions, and all other creditors?

Please ensure proper formatting and provide the necessary information. Thank you.