What is the compensation payable to the employees of some phased out projects in the Developments sector (Not for Profit organisation)
The unit/project size is 35 staffers , however 10-14 may have to go.
2-3 projects are unviable and do not serve the organisational objectives any more.
The staff will have to be retrenched (this after considering some of them for transfers to other locations/projects), the remaining just cannot be accomodated anywhere.
What kind of compensation would be required to be paid out, so that the whole process is a legal one.
Are there any seperate central & state laws in force ? what is it like in the state of Maharashtra.
Also what difference would it make if its a Trust , a Society or a Scetion 25 (Charity company u/s 25 of companies Act 1956)
Please guide & advise.
Sam
27th April 2010 From India , Mumbai
Hi,
Please ascertain whether you are an "Industry" as defined in the Industrial Disputes Act,. I was advised through this forum that an NGO is also an industry.
Presuming you are one, you can retrench the workers by giving one months notice. You donot have to seek permission of the State Government as you are employing less than 50 workers. You can pay the workers 15 days pay for every completed years of serve along with the notice pay. This in my view, is the legal requirement.
It is always safe to employ workers for the project duration, where a specific date is mentioned in the appointment letter. On the expiry of this day the person's services stand terminated due to 'non-renewal of contract'. Such non renewal of contract does not amount to retrenchment and there is no need to pay any additional compensation including the notice pay. The tenure of employment is regulated in terms of the contract of service.
Cyril
23rd May 2010 From India , Nagpur
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