My company in Kozhikode wants to close down its manufacturing unit; what notice and procedure must be followed under the law?

Detailed Legal Analysis

Under Chapter VB of the Industrial Disputes Act, 1947, an industrial establishment with 100 or more workers must give at least ninety days' notice to the appropriate government before closing down, stating the reasons for closure and the number of workers affected. The government may, within sixty days of the notice, prohibit or permit the closure, and if no order is passed, the closure is deemed permitted after sixty days.

The employer must pay retrenchment compensation to workers, including fifteen days' wages for every completed year of service, and any outstanding dues such as gratuity and PF. The Kerala High Court may be approached if the closure is challenged or if the government's order is arbitrary.

The Kerala Rent Control Act 1963 on industrial disputes may have additional closure-related provisions. Workers can raise an industrial dispute if the closure is not bona fide or if compensation is not paid.

The closure notice must be displayed on the notice board and copies sent to the workers and the government.