Closure notice not in correct format: Odisha

Last Updated: Wed, Dec 05, 2012 21:50 hrs

Even as Vedanta Aluminium Ltd (VAL) today started the process of shutting down its Lanjigarh aluminium refinery, the Odisha government claimed the closure notice given by the company was “not in the proper format” as stipulated by the provisions of the Industrial Disputes Act.

“We have not received any information in the prescribed format from the concerned company as per the provisions of the Industrial Disputes Act,” Deputy Labour Commissioner Narendra Kumar Samantray told Business Standard.

He said that the closure notice would be taken into cognizance by the state government only after receiving it in the prescribed format.

Samantray pointed out that VAL had only written a formal letter in September, intimating its intention to close down the 1 mtpa (million tonne per annum) refinery temporarily from December 5. The company had attributed the cause for this action to economic unviability of the plant in the absence of assured supply of bauxite.

“We do not have any role to play now. But the company may face legal hurdles if it retrenches any employee or stops paying its staff after shut down of the plant,” said Samantray.

According to Section 25-O of the Labour Act, an employer has to give a 90 days’ notice in the prescribed format to the appropriate government authority, clearly stipulating the reasons for the intended closure.

VAL employs around 550 permanent employees, while 5,000 are engaged indirectly and 1,000 self-employed in and around the plant.

“We have followed all the format laid out in the relevant section of the Industrial Disputes Act, without mentioning so, in our letter to the labour department,” said VAL CEO Mukesh Kumar. He added that there is no provision to give advance notice for temporary closure and that the Act only mentions the procedure to seek permission for permanent closure of an establishment. “As our intention was not to shut down the plant for good, we have not mentioned about Section 25-O of the Act while informing the authorities about our move, though we have followed the format prescribed in the law”, he clarified.

Meanwhile, VAL has begun the process to shut down its refinery today.

“Since morning, we have stopped feeding bauxite to the plant and by the evening both the refinery and the 75 MW captive power plant attached to it will stop operating. It will take about 20-22 hours to clear the inventories,” said Kumar.

He added that the company will not open the refinery “unless and until we have assured bauxite supply for at least four to five months”.

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