Check before closing

Updated: Jan 25 2002, 05:30am hrs
Its well known that labour laws in India are heavily loaded in favour of the working class. Even so, or perhaps on account of this systemic bias, the governments proposal to allow units employing less than 1,000 workers to close shop without seeking the States permission is regarded as anti-labour. What if, under one pretext or the other, company managements decide to close shop Given the slowdown afflicting manufacturing, there is a genuine concern that disbanded workers may find it extremely difficult to land themselves new jobs. Here one recalls the unique case of a California-based textile exporting firm which was gutted in a devastating fire a few years ago. Acting against all advice to seize the opportunity and move away to a low-wage island, the owner of the firm not only kept all his 1,500 employees on the company rolls, but paid them regularly and thus ensured their continuance even as the factory was being rebuilt in the same premises. Admittedly though, such benevolent industrialists remain an extremely rare species in India!

True, the union labour ministry has agreed to raise the upper ceiling of workers entitled for protection under the Payment of Wages Act from Rs 1,600 to Rs 6,500 per month but will that be sufficient to see laid-off workers through when alternate job opportunities are few and far between Clearly, there must be checks and balances in place, and cases of closure will have to be treated on merit. The Supreme Courts recent ruling that establishments will not have unfettered rights to close down is, therefore, significant. The apex court has made it mandatory for establishments seeking closure to approach the appropriate governmental authority for necessary permission. This provision is already available in Section 25-0 of the Industrial Disputes Act. Since the Supreme Court has now rightly upheld the constitutional validity of this section, it is hoped that the labour ministry will retain the same in the Industrial Disputes Act which is sought to be amended. This indeed is the safety valve at the governments disposal which must be utilised to protect workers interests when recalcitrant establishments approach it for permission to close down. If the government is not satisfied with the genuineness of the case, it is always free to reject the application which is as it should be.