Termination due to redundancy and Minister’s order on closure or sale or business

(1) The employer may terminate the employment of the worker by giving the required notice according to section 37, if the worker becomes redundant under the provisions of sub- (2) The worker becomes redundant under sub-section (1) where, in relation to his employer’s business where he is employed, his termination of employment is or part of a reduction in the work force that is a direct result of– (a) the modernization, automation, or mechanization by the employer of all or part of the business; (b) the discontinuance by the employer to carry on all or part of the business; (c) the sale of or the disposition of all or part of the business; (d) subject to section 44(4), the reorganization of the business by the employer to improve efficiency; (e) the impossibility or impracticability for the employer to carry on the business at its usual rate or level or at all due to– (i) a shortage of materials; (ii) a mechanical breakdown; (iii) an act of God; (f) a reduced operation in the employer’s business made necessary by economic conditions, including a lack of or change in markets, contraction in the volume of work or sales, reduced demand or surplus inventory; 41 (g) any other circumstances which the Minister may by Order published in the Gazette, determine. (3) Prior to terminating the employment of any worker pursuant to this section, the employer shall– (a) inform as early as possible but not later than one month from the date of the existence of any circumstances mentioned in sub-section (2), the recognized trade union, or if none exists, the workers’ representative, and in any case with the Labour Commissioner of– (i) the existence of any of the circumstances mentioned in sub-section (2); (ii) the reasons for the contemplated termination of employment; (iii) the names, numbers and categories of the persons likely to be affected; (iv) the period over which such terminations are likely to be carried out; (v) a list of existing or expected claims of the workers employed by the employer arising from or in context with the employment (such as compensation, benefits or other payments due); and (vi) any other matter as may be relevant; (b) consult as early as possible but not later than one month from the date of the existence of any of the circumstances mentioned in sub- section (2), with the recognized trade union or 42 if none exists, the workers’ representative and in any case with the Labour Commissioner on– (i) the possible measures that could be taken to avert or minimize the adverse effects of such situations on (ii) the planned settlement of the workers claims; and (iii) the possible measures that could be taken to mitigate the adverse effects of any terminations on the workers concerned. (4) The Minister may by written order, prior to a change of name, or sale, or transfer, or closure of an enterprise request the employer to provide financial security in the amounts he sees fit to satisfy the existing claims from workers and the employer shall comply with such order within one month from the date of receipt of the Minister’s order. (5) The financial security made by order under sub-section (3), shall be made with the Commissioner in an account set up for that purpose. (6) Where an employer fails to comply with an order under sub-section (3), the Commissioner shall recover the amount due in a civil suit. (7) Notwithstanding sub-section (4), a new employer planning to take over an employment relationship from the current employer may agree with the current employer and the worker to take over part or all of the claims of the worker concerning the previous employment relationship. 43