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Dear All,

Does anyone have any idea on how to remove excess non-supervisory category staff without violating labor laws? They are covered by laws, and the court can immediately reinstate them if they go to court. We have a few excess support staff without any work, and we do not foresee any work in the near future for them. As HR professionals, we know it's not ethically correct, but for the survival of the company, we have to proceed. Even the company does not wish to pay any compensation beyond the statutory amount. If anyone has experience with such an exercise, please share your insights.

From India, Pune
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You move with the rules of retrenchment in your state. Your primary reason for retrenchment is the setback in business due to the losses suffered from the pandemic. The manpower assessment shows that you have excess manpower in consideration of the current production requirements. You do not foresee any development in the near future as new players have emerged in the field. If your union exists, take them into confidence by saying, "one stitch can save the whole cloth."
From India, Mumbai
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Dear Sunil,

Strictly speaking, unlike in Western countries such as the USA, the concept of "employment at will" is not upheld by the Indian Judiciary. That's why industrial relations laws like the Industrial Disputes Act, 1947, have certain restrictive provisions on the discharge of labor by employers in tune with their business vicissitudes, which are constantly decried by the proponents of sweeping market-oriented labor reforms. Mr. Prabhat Ranjan has rightly indicated this process in the opening part of his reply.

Coming to your thread, it is heartening to note that your management is desirous of jettisoning the consequential surplus labor without violating the provisions of the existing labor laws. Such a smooth separation is possible at most if the total number of workmen in your establishment falls below 100 on average per day during the preceding 12 months period to the actual date of the proposed retrenchment. Otherwise, you will have to apply for prior permission from the appropriate government, giving three months' notice to the affected workmen. Though certain states like Rajasthan have already increased this threshold to 300, normally it is a difficult process as the government may refer the matter to an industrial tribunal out of fear of public criticism. So what is advisable at this juncture is a negotiated settlement with the labor through their trade unions, for which your management should be flexible in the matter of the compensation package with a long-term perspective.

From India, Salem
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Hi, good. It's a gentleman's query.

No one suggests retaining those unproductive employees in your company if your presentation is totally true. First, display all your company's profits and losses on the noticeboard. Secondly, conduct a meeting with all your company employees' union representatives with the true facts of the company. Thirdly, offer proposals for voluntary retirements covering all benefits under labor laws. Clear all EPF and ESI troubles of obtaining benefits with necessary signatures and documents. Open an advisory cell counseling center within your company with the guidance of a senior employee for obtaining retirement benefits from the company as well as ESI and EPF boards. If the presentation of the facts of the company is done truthfully, the employees will not disagree. Initially, they may have some fears and doubts, but with moral support from HR, they will follow your lead. What is needed is your frankness and prepared measures to protect the company. Excess employees will understand only when you are telling the truth. Don't fear the labor department. There is no rule that penalizes you when you abide by labor laws. The labor department will not force you to pay more than required by the laws of the land. Please proceed as the central government and all state governments have initiated a new procedure called "INSPECTION FREE RAJ" and a liberalization policy. So, all factories have received legal relief in these areas as well. Submit a detailed report on your company's financial position and the necessity for compulsory retirement for some excess employees in your company well before advancing in the retirement procedure. So, go ahead. All the best.

From India, Nellore
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Dear Mr. Umakanthan.M Please advise if such case is applicable in S&E also having strength more than 100. State is UP.
From India, New Delhi
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