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.
23rd May 2010 From India , Nagpur