Social Outcomes of Closure and Retrenchment of Workers

Abstract

In the last few years, a large number of workers have lost their jobs due to Voluntary Retirement Scheme, retrenchments and closures both in the organised and unorganised sector. In practice, there is hardly any check on either the use of contract labour for jobs of a permanent nature, or on retrenchment or closure of units. Employees are often the casualty of retrenchment. Loss of service due to closure stands on the same footing as loss of service due to retrenchment, for in both cases, the employee is out of employment suddenly and for no fault of his. Closure of an undertaking involves termination of employment of many employees. The sudden unemployment poses great hardship, not only to the concerned workmen but also to his entire family. The article presents a compilation of literature and attempts to examine the basic theoretical concepts in the light of available legal framework regarding closure and retrenchment. The first section of the article describes the historical perspective of closures and retrenchment. The second section describes the importance and the study objectives in the light of the legislative provisions related to closure and retrenchment. The third section reviews literature that allows us to understand the evolution of the topic, the theoretical conceptualizations and the evidences of the social impact of closures and retrenchment in India. The article concludes with the socio-cultural context of the issue and addresses the possibilities of developing a study that would allow an empirical examination of the topic in the near future. Keywords: Retrenchment, Voluntary Retirement Scheme

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