Retrenchment Case: Validity of the retrenchment challenged under Chapter 5B of the ID Act.
As of 28th April 2004, 85 regular workmen were employed in the factory. 48 of them were retrenched based on LIFO on 29th April 2004. Other temporaries and casuals were not considered in this calculation of total workmen under Chapter 5B. This is the point of contention from the union, and they want the retrenchment to be deemed illegal.
Conciliation proceedings ensued, and a meeting was held with DLC. Our lawyer covered up the issue. However, the union was not satisfied, and conciliation proceedings failed. Hence, the matter was referred to the labor court. This was the point where 48 were involved. (May 2004)
Re-employment was offered on a temporary basis for an order in December 2005 at 75% of their last drawn wages. An agreement was signed with the union in Form H. After the order was foreclosed by the customer on 10th March 2006, they were asked to stop reporting to work. They refused to leave the premises, resulting in a Gherao, and the plant had to be shut down for 10 days. A temporary lockout was declared. The retrenched people approached the ALC and were directed to the DLC. The DLC asked both parties to pursue the proceedings in court as the matter was still pending before the labor court. The same DLC, unofficially, had a meeting with the Union and Management and helped come up with the VRS scheme. The DLC acted in good faith on his personal visit, and the VRS scheme was the outcome of oral negotiations with the Union, Management, and the DLC. The worked-out scheme was 45 days' wages for every year of service and a one-time payment of Rs. 1000. Fourteen out of the 48 people opted for this scheme in July 2006. Later, small batches came in to avail the VRS scheme, and finally, 22 people opted for the same as of March 2007.
The remaining 26 people were again called back for re-employment on a temporary basis for another order on 11th July 2007. They refused to accept the re-employment offer, demanding permanent employment as opposed to the temporary employment provided for the particular order.
The 26 people were still contesting the cases in court. In March 2008, during negotiations with the union, the one-time payment was increased to Rs. 15000. This time 16 people availed the scheme on 31st March 2008.
Finally, 10 remained. They are still fighting the case, which is in the cross-examination stage.
Negotiation efforts at right intervals were carried out. First through the Union leaders and then on a one-on-one basis with the HR Manager. It has been amply communicated to them about the condition of the company and how it is in their best interest to take the settlement. The negotiations were in a deadlock.
During the end of July, another scheme was worked out for the remaining 10 where they were offered approximately Rs. 40,000/- as a one-time payment. This worked out to be roughly 50% higher than the total settlement amount previously offered. Extensive interactions and negotiation efforts have not been successful. They are demanding very high compensation of Rs. 3-5 Lacs or reinstatement.
This is a case that we are currently contesting in court. Kindly give your inputs.
From India, Bangalore
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As of 28th April 2004, 85 regular workmen were employed in the factory. 48 of them were retrenched based on LIFO on 29th April 2004. Other temporaries and casuals were not considered in this calculation of total workmen under Chapter 5B. This is the point of contention from the union, and they want the retrenchment to be deemed illegal.
Conciliation proceedings ensued, and a meeting was held with DLC. Our lawyer covered up the issue. However, the union was not satisfied, and conciliation proceedings failed. Hence, the matter was referred to the labor court. This was the point where 48 were involved. (May 2004)
Re-employment was offered on a temporary basis for an order in December 2005 at 75% of their last drawn wages. An agreement was signed with the union in Form H. After the order was foreclosed by the customer on 10th March 2006, they were asked to stop reporting to work. They refused to leave the premises, resulting in a Gherao, and the plant had to be shut down for 10 days. A temporary lockout was declared. The retrenched people approached the ALC and were directed to the DLC. The DLC asked both parties to pursue the proceedings in court as the matter was still pending before the labor court. The same DLC, unofficially, had a meeting with the Union and Management and helped come up with the VRS scheme. The DLC acted in good faith on his personal visit, and the VRS scheme was the outcome of oral negotiations with the Union, Management, and the DLC. The worked-out scheme was 45 days' wages for every year of service and a one-time payment of Rs. 1000. Fourteen out of the 48 people opted for this scheme in July 2006. Later, small batches came in to avail the VRS scheme, and finally, 22 people opted for the same as of March 2007.
The remaining 26 people were again called back for re-employment on a temporary basis for another order on 11th July 2007. They refused to accept the re-employment offer, demanding permanent employment as opposed to the temporary employment provided for the particular order.
The 26 people were still contesting the cases in court. In March 2008, during negotiations with the union, the one-time payment was increased to Rs. 15000. This time 16 people availed the scheme on 31st March 2008.
Finally, 10 remained. They are still fighting the case, which is in the cross-examination stage.
Negotiation efforts at right intervals were carried out. First through the Union leaders and then on a one-on-one basis with the HR Manager. It has been amply communicated to them about the condition of the company and how it is in their best interest to take the settlement. The negotiations were in a deadlock.
During the end of July, another scheme was worked out for the remaining 10 where they were offered approximately Rs. 40,000/- as a one-time payment. This worked out to be roughly 50% higher than the total settlement amount previously offered. Extensive interactions and negotiation efforts have not been successful. They are demanding very high compensation of Rs. 3-5 Lacs or reinstatement.
This is a case that we are currently contesting in court. Kindly give your inputs.
From India, Bangalore
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First of all, I presume you represent the employer and not the employee(s).
Secondly, the length of service of these 10 employees and their last drawn salaries are not available from the post. Similarly, their remaining years of service with your company also have a direct bearing on the amount of settlement.
For an average workman drawing a minimum rate of wages with a length of 10 years of service, he will receive an amount exceeding Rs 40,000 in case of discharge. This amount includes gratuity and retrenchment compensation as part of the settlement.
Regards,
Madhu.T.K
From India, Kannur
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4473Secondly, the length of service of these 10 employees and their last drawn salaries are not available from the post. Similarly, their remaining years of service with your company also have a direct bearing on the amount of settlement.
For an average workman drawing a minimum rate of wages with a length of 10 years of service, he will receive an amount exceeding Rs 40,000 in case of discharge. This amount includes gratuity and retrenchment compensation as part of the settlement.
Regards,
Madhu.T.K
From India, Kannur
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Some of the observations listed below are as follows:
1. It is mentioned "As on," which means they are retrenched within a day. If it were "As of," it would make more sense.
2. Re-employment on a temporary basis where the offer was at 75% of the last drawn salary is more than what the Act offered.
From India, Bengaluru
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1. It is mentioned "As on," which means they are retrenched within a day. If it were "As of," it would make more sense.
2. Re-employment on a temporary basis where the offer was at 75% of the last drawn salary is more than what the Act offered.
From India, Bengaluru
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