Hello Everyone,
I am the HR of our company. One of our units in Delhi is closed due to the economic slowdown. As a result, the employees working in that unit were issued relieving letters without being informed about the unit's closure. They have now sent a notice to the Director of the company, demanding salary for 2-3 months, claiming that they were not informed about the closure.
In short, the issue is about issuing relieving letters to the employees without informing them that the unit is already closed. Now, I have been asked to send the relieving letters to those employees of the Delhi Unit.
Can you please let me know the legal consequences of the relieving letter? I seek your guidance. It's urgent. Please help me.
From India, Mumbai
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2I am the HR of our company. One of our units in Delhi is closed due to the economic slowdown. As a result, the employees working in that unit were issued relieving letters without being informed about the unit's closure. They have now sent a notice to the Director of the company, demanding salary for 2-3 months, claiming that they were not informed about the closure.
In short, the issue is about issuing relieving letters to the employees without informing them that the unit is already closed. Now, I have been asked to send the relieving letters to those employees of the Delhi Unit.
Can you please let me know the legal consequences of the relieving letter? I seek your guidance. It's urgent. Please help me.
From India, Mumbai
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According to the ID Act Section 25-N, retrenchment compensation is payable in the following conditions. I hope this will help you to understand the situation better.
25N. CONDITIONS PRECEDENT TO RETRENCHMENT OF WORKMEN:
No workman employed in any industrial establishment to which this Chapter applies, who has been in continuous service for not less than one year under an employer, shall be retrenched by that employer until:
(a) the workman has been given three months' notice in writing indicating the reasons for retrenchment and the period of notice has expired, or the workman has been paid in lieu of such notice, wages for the period of the notice; and
(b) the prior permission of the appropriate Government or such authority as may be specified by that Government by notification in the Official Gazette (hereafter in this section referred to as the specified authority) has been obtained on an application made in this behalf.
An application for permission under sub-section (1) shall be made by the employer in the prescribed manner stating clearly the reasons for the intended retrenchment, and a copy of such application shall also be served simultaneously on the workmen concerned in the prescribed manner.
Where an application for permission under sub-section (1) has been made, the appropriate Government or the specified authority, after making such enquiry as it thinks fit and after giving a reasonable opportunity of being heard to the employer, the workmen concerned, and the persons interested in such retrenchment, may, having regard to the genuineness and adequacy of the reasons stated by the employer, the interests of the workmen and all other relevant factors, by order and for reasons to be recorded in writing, grant or refuse to grant such permission, and a copy of such order shall be communicated to the employer and the workmen.
Where an application for permission has been made under sub-section (1) and the appropriate Government or the specified authority does not communicate the order granting or refusing to grant permission to the employer within a period of sixty days from the date on which such application is made, the permission applied for shall be deemed to have been granted on the expiration of the said period of sixty days.
An order of the appropriate Government or the specified authority granting or refusing to grant permission shall, subject to the provisions of sub-section (6), be final and binding on all the parties concerned and shall remain in force for one year from the date of such order.
The appropriate Government or the specified authority may, either on its own motion or on the application made by the employer or any workman, review its order granting or refusing to grant permission under sub-section (3) or refer the matter or, as the case may be, cause it to be referred, to a Tribunal for adjudication:
Provided that where a reference has been made to a Tribunal under this sub-section, it shall pass an award within a period of thirty days from the date of such reference.
Where no application for permission under sub-section (1) is made, or where the permission for any retrenchment has been refused, such retrenchment shall be deemed to be illegal from the date on which the notice of retrenchment was given to the workman, and the workman shall be entitled to all the benefits under any law for the time being in force as if no notice had been given to him.
Notwithstanding anything contained in the foregoing provisions of this section, the appropriate Government may, if it is satisfied that owing to such exceptional circumstances as an accident in the establishment or death of the employer or the like, it is necessary to do so, by order, direct that the provisions of sub-section (1) shall not apply in relation to such establishment for such a period as may be specified in the order.
Where permission for retrenchment has been granted under sub-section (3) or where permission for retrenchment is deemed to be granted under sub-section (4), every workman who is employed in that establishment immediately before the date of application for permission under this section shall be entitled to receive, at the time of retrenchment, compensation which shall be equivalent to fifteen days' average pay for every completed year of continuous service or any part thereof in excess of six months.
From India, Pune
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25N. CONDITIONS PRECEDENT TO RETRENCHMENT OF WORKMEN:
No workman employed in any industrial establishment to which this Chapter applies, who has been in continuous service for not less than one year under an employer, shall be retrenched by that employer until:
(a) the workman has been given three months' notice in writing indicating the reasons for retrenchment and the period of notice has expired, or the workman has been paid in lieu of such notice, wages for the period of the notice; and
(b) the prior permission of the appropriate Government or such authority as may be specified by that Government by notification in the Official Gazette (hereafter in this section referred to as the specified authority) has been obtained on an application made in this behalf.
An application for permission under sub-section (1) shall be made by the employer in the prescribed manner stating clearly the reasons for the intended retrenchment, and a copy of such application shall also be served simultaneously on the workmen concerned in the prescribed manner.
Where an application for permission under sub-section (1) has been made, the appropriate Government or the specified authority, after making such enquiry as it thinks fit and after giving a reasonable opportunity of being heard to the employer, the workmen concerned, and the persons interested in such retrenchment, may, having regard to the genuineness and adequacy of the reasons stated by the employer, the interests of the workmen and all other relevant factors, by order and for reasons to be recorded in writing, grant or refuse to grant such permission, and a copy of such order shall be communicated to the employer and the workmen.
Where an application for permission has been made under sub-section (1) and the appropriate Government or the specified authority does not communicate the order granting or refusing to grant permission to the employer within a period of sixty days from the date on which such application is made, the permission applied for shall be deemed to have been granted on the expiration of the said period of sixty days.
An order of the appropriate Government or the specified authority granting or refusing to grant permission shall, subject to the provisions of sub-section (6), be final and binding on all the parties concerned and shall remain in force for one year from the date of such order.
The appropriate Government or the specified authority may, either on its own motion or on the application made by the employer or any workman, review its order granting or refusing to grant permission under sub-section (3) or refer the matter or, as the case may be, cause it to be referred, to a Tribunal for adjudication:
Provided that where a reference has been made to a Tribunal under this sub-section, it shall pass an award within a period of thirty days from the date of such reference.
Where no application for permission under sub-section (1) is made, or where the permission for any retrenchment has been refused, such retrenchment shall be deemed to be illegal from the date on which the notice of retrenchment was given to the workman, and the workman shall be entitled to all the benefits under any law for the time being in force as if no notice had been given to him.
Notwithstanding anything contained in the foregoing provisions of this section, the appropriate Government may, if it is satisfied that owing to such exceptional circumstances as an accident in the establishment or death of the employer or the like, it is necessary to do so, by order, direct that the provisions of sub-section (1) shall not apply in relation to such establishment for such a period as may be specified in the order.
Where permission for retrenchment has been granted under sub-section (3) or where permission for retrenchment is deemed to be granted under sub-section (4), every workman who is employed in that establishment immediately before the date of application for permission under this section shall be entitled to receive, at the time of retrenchment, compensation which shall be equivalent to fifteen days' average pay for every completed year of continuous service or any part thereof in excess of six months.
From India, Pune
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