Maharashtra govt eases policy on closure of factories

Closures are in as far as Maharashtra is concerned. The unwritten government policy of denying permission to factories and establishments seeking to close shop is no longer in force.

The last fortnight saw three units in the state being permitted to effectively close down. Two others were, however, declined permission for closure by labour commissioner MB Gajre (additional charge).

Confirming this shift of policy, Gajre said: "I have issued closure permissions for Mukund Engineering (Mumbai city), Shalimar Wires (Nashik) and for the glass division of Tilak Nagar Distilleries (Ahmednagar). However, permission for closure was denied to the Golden Chemicals unit at Dahisar (Mumbai suburb) and Mam Forge (Bhandup in Mumbai)."

Gajre added that the shift in thinking in respect of granting closure permissions has come about in the wake of rampant illegal closures by manufacturing units in the state, despite being denied state government permission for doing so.

He further said that by, granting 'closure' permission (where the manufacturing unit is found to be unviable), the workers' dues are on par with the secured creditors of the closed unit that offers a form of security for the workers.

"Instances like the Khatau Mill (Mumbai) "" which for the last seven years is neither closed down nor operating "" have brought about this change. It is noticed that by simply denying the permission to close down we are not able to protect worker interests. The units simply stop paying their electricity bills which results in power to their unit being disconnected, leading to a stoppage of production activity. Workers dues remain unpaid with pending litigation before the industrial and labour courts continuing for years together."

In a similar instance, 35 workers in September 2003 won an order from the Labour Court (Bandra) in respect of their dues owed by the Central Insecticides manufacturing facility that was functional till 1993 in the Andheri suburb of Mumbai.

Says president of the Kamgar Aghadi, PN Samant (the union fought the legal case on behalf of the workers): "In 1993 the company sold off their land to a developer who has since constructed multistoreyed buildings on the land and sold off individual units to buyers. Even with the labour court order the workers are unable to secure their dues since no one is currently available for servicing the order."

He added that even though the state government has recently directed that henceforth no construction activity would be permitted upon plots of land that formerly housed manufacturing units, where the dues of workers are pending, in cases like Central Insecticides the construction activity is completed and there is little scope for recovering the workers' dues.