Can anyone tell me what the redundancy process is in India? There are around 6 people working in India for the last 20-24 years. Our group company wishes to release them as the job they were doing will be transferred to Bahrain through software.
From India, Mumbai
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From India, Mumbai
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Dear Leena, you want to shift the jobs done physically by the six people from India for the past couple of decades to Bahrain to be done through software. Can we take it as the closing down of your entire operations in India, or only dispensing with the services of the said six people as redundant? Both processes are covered by the provisions of the Industrial Disputes Act, 1947.
Closure and Retrenchment under the Industrial Disputes Act
The first one is defined as "closure" under section 2(cc) of the Act, meaning the permanent closing down of a place of employment or a part thereof. The second one is defined as "retrenchment" under section 2(oo) of the Act. It means the termination of the employment of a workman by the employer for whatever reason other than dismissal for misconduct. It also excludes termination of employment by way of resignation or voluntary retirement by the employee, normal retirement due to reaching the predetermined age of superannuation by the employee, due to non-renewal of the contract of employment after its expiry, or termination due to continued ill-health of the workman concerned.
Retrenchment Process
Anyhow, the termination of the employment of the six people, if they are "workmen" as defined under section 2(s) of the Act, would fall under retrenchment. Therefore, as their employer, you have to give notice or notice pay in lieu of notice and pay retrenchment compensation, which shall be equivalent to 15 days' average pay for every completed year of continuous service or in any part thereof in excess of six months as per the provisions of section 25-F of the Act. In addition, you have to pay them gratuity for the entire services rendered by them as per the provisions of the Payment of Gratuity Act, 1972, if applicable to your establishment. If your Indian operations involve 100 or more workmen, both for closure and retrenchment, you will have to obtain prior permission from the appropriate Government under the Act. Therefore, it would be better to work out a voluntary separation scheme by initiating a dialogue with the workmen and make the exit peaceful.
From India, Salem
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6108Closure and Retrenchment under the Industrial Disputes Act
The first one is defined as "closure" under section 2(cc) of the Act, meaning the permanent closing down of a place of employment or a part thereof. The second one is defined as "retrenchment" under section 2(oo) of the Act. It means the termination of the employment of a workman by the employer for whatever reason other than dismissal for misconduct. It also excludes termination of employment by way of resignation or voluntary retirement by the employee, normal retirement due to reaching the predetermined age of superannuation by the employee, due to non-renewal of the contract of employment after its expiry, or termination due to continued ill-health of the workman concerned.
Retrenchment Process
Anyhow, the termination of the employment of the six people, if they are "workmen" as defined under section 2(s) of the Act, would fall under retrenchment. Therefore, as their employer, you have to give notice or notice pay in lieu of notice and pay retrenchment compensation, which shall be equivalent to 15 days' average pay for every completed year of continuous service or in any part thereof in excess of six months as per the provisions of section 25-F of the Act. In addition, you have to pay them gratuity for the entire services rendered by them as per the provisions of the Payment of Gratuity Act, 1972, if applicable to your establishment. If your Indian operations involve 100 or more workmen, both for closure and retrenchment, you will have to obtain prior permission from the appropriate Government under the Act. Therefore, it would be better to work out a voluntary separation scheme by initiating a dialogue with the workmen and make the exit peaceful.
From India, Salem
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