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  • Closure compensation

We had a factory where we had employed less than 100 workers in Allahabad, Uttar Pradesh.In the year 2001 we closed down our factory due to losses and contracts not getting renewed. Labours have filed a case in the Allahabad Labour Court as they have demanded Closure compensation from us. We gave one manths notice period salary to them and cleared all their dues but no closure compensation was given to them. We also did not seek permission for the closure as we employed less than 100 workers. What I wanted to know whether we are liable for closure compensation?
Asked 7 years ago in Labour

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6 Answers

Dear Client,

You case will consider under Industrial Dispute act which applies irrespective of the number of workmen employed therein and prior permission of at least 90 days.

And workmen entitled to receive compensation which shall be equivalent to fifteen days’ average pay for every completed year of continuous service.

 

Yogendra Singh Rajawat
Advocate, Jaipur
23081 Answers
31 Consultations

Retrenchment compensation not one month salary Calculation as follows:Last drawn salary/30*15 days &No.Of Years(It's 15 days salary for each completed year) either your closing it or not the matter here is your are laying Off the Workmen reason whatsoever so the in the context of industrial dispute raises in the court of Law ,then you have to pay Retrenchment compensation as above said calculation.

 

Here appropriate Authority means "nature of operation if it under factories then you have to send Inspector of Factories,Other than this covered in the Shops and Commercial Establishment then

"Joint Commissioner of Labour/Deputy Commissioner of Labour "
Gratuity(Continuation of Five Years of Service) ,Bonus(Workmen drawing wage below 10,000/-P.M) ,

Retrenchment Compensation , Salary in the lieu of notice,Leave with wages proportionate to daily average wage shall be paid.


I hope you got clarity to extent.

Sanjay Baniwal
Advocate, South Delhi
5477 Answers
13 Consultations

In case when there are less than 100 employees then you are not liable to pay closure compensation. 

Also the demand can not be raised after 17 years, the claim is barred by limitation. 

Section 25F provides for conditions precedent to retrenchment of workers, Section 25F(b) provides for payment for retrenchment compensation which shall be equivalent to 15 day’s average pay for every completed year of continuous service or any part thereof in excess of 6 months.

Anilesh Tewari
Advocate, New Delhi
18103 Answers
377 Consultations

Sir you are liable to pay the closure compensationn under meaning of section 25 FFF Industrail Dispute act there is no condition as such prescribed for minimum employees for the copensation so you shall be liable to pay same.

1) Where an undertaking is closed down for any reason whatsoever, every workman who has been in continuous service for not less than one year in that undertaking immediately before such closure shall, subject to the provisions of sub-section (2), be entitled to notice and compensation in accordance with the provisions of section 25F, as if the workman had been retrenched:

PROVIDED that where the undertaking is closed down on account of unavoidable circumstances beyond the control of the employer, the compensation to be paid to the workman under clause (b) of section 25F, shall not exceed his average pay for three months:

134[Explanation: An undertaking which is closed down by reason merely of-

(i) financial difficulties (including financial losses); or

(ii) accumulation of undisputed off stocks; or

(iii) the expiry of the period of the lease or license granted to it; or

(iv) in case where the undertaking is engaged in mining operations, exhaustion of the minerals in the area in which operations are carried on,

shall not be deemed to be closed down on account of unavoidable circumstances beyond the control of the employer within the meaning of the proviso to this su

Shubham Jhajharia
Advocate, Ahmedabad
25513 Answers
179 Consultations

If your father is a senior citizen, he may instute a complaint in the Senior Citizens Tribunal.

In his complaint, he must meticulously give a description of all the atrocities that he is suffering at the hands of her daughter in law and her parents.

He also has the option of moving a complaint with the Police. 

Vibhanshu Srivastava
Advocate, Lucknow
9763 Answers
323 Consultations

Yes, beside other sections of ID Act please go through Sec.25 FFA.

Koshal Kumar Vatsa
Advocate, Gurgaon
2282 Answers
3 Consultations

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