When considering a block closure of a unit, it's important to take into account the rights of all employees, including contractual workers.
According to Indian labor laws, specifically the Industrial Disputes Act, 1947, you are required to give notice to your employees before a layoff, including those on a contractual basis. The notice period and the amount of compensation depend on the length of service and the terms of the contract.
Here are the steps you need to follow:
1. Issue a Notice: The first step is to issue a formal notice to all the employees, including the contractual ones, informing them about the block closure. The notice should clearly explain the reasons for the closure and the expected last working day.
2. Calculate and Disburse Compensation: The compensation for the contractual employees will be based on their contract terms. In general, the Industrial Disputes Act, 1947, requires that the workers be paid compensation equivalent to 15 days' average pay for every completed year of continuous service. This is in addition to any notice period payment.
3. Complete Full and Final Settlement: The full and final settlement should include the last month's salary, unpaid leave balance, gratuity (if applicable), and the compensation calculated in step 2.
4. Issue a Service Certificate: Provide a certificate of service to the contractual employees, which will help them in their future job search.
5. Communication: Maintain open communication with the employees throughout the process to address any issues or concerns they might have.
Remember to consult with a legal expert or labor law consultant to ensure that you are fully compliant with all the legal requirements. It's also important to treat your employees with respect and empathy during this difficult time.