Legal Manager (Legal Manager) 10 March 2011

Procedure to close the compny while adjudication pending

Dear Sir,

I would like to have your personal advise in below scenario.

We have 6 small various companies in at one campus and same location with different name deploying less than 50 manpower on daily basis since more than one year. We have two union at work place. We have made settlement with majority of Union.The other union have not accepted the said settlement hence they have given separate charter of demand and later this dispute referred to labor court for adjudication. Meanwhile they have resorted to illegal strike in April 2007 and till date they are abstaining from the work. By the way we have submitted an application to Labour court to declare this act as illegal strike and case is now on leading evidence from our end.

In such situation can we close our sister concern ?
Do we need to seek permission from Labour court where dispute of illegal strike is pending.
What is the procedure for applying closure of establishment?
What reason we can lead to justify the closure?
What can we do with the employees who are with majority of union and are working in this sister concerns?

Would appreciate your help and reply.

Thanking you,

Regards,
Rita

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1 Replies

Kirti Kar Tripathi (lawyer) 24 March 2011

In case, workman are less than 300, the employer is not required to seek permission from appropriate government for closer but in the present case , since an industrial dispute is already pending, the closer will amount to change in service condition, thus employer has to move application for permission for closing down of industry stating therein the reasons of the closer. if ground are sufficient the permission will granted as to close down its business is the fundamental right of employer but at the same time it should not be vindictive and in order to frustrate the pending dispute. court can not refuse bonafide closer of an industry.