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
From India, Bangalore
Acknowledge(0)
Amend(0)
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
From India, Bangalore
Acknowledge(0)Amend(0)
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
From India, Pune
Acknowledge(1)
Amend(0)
66If 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
From India, Pune
Acknowledge(1)Amend(0)
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.
From India, Salem
Acknowledge(2)
Amend(0)
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.
From India, Salem
Acknowledge(2)Amend(0)
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.
From India, Salem
Acknowledge(0)Amend(0)
From India, Salem
Acknowledge(0)Amend(0)CiteHR is an AI-augmented HR knowledge and collaboration platform, enabling HR professionals to solve real-world challenges, validate decisions, and stay ahead through collective intelligence and machine-enhanced guidance. Join Our Platform.
Industrial Relations.ppt
Industrial Relations (TN) rules 2022.pdf