The state labour commissioner has granted permission to the management of Hindustan Crown Mills to shut its unit, which has been lying defunct for years.
Around 880 workers and 735 employees working at the processing unit of the factory and affiliated to the Rashtriya Mill Mazdoor Sangh have already opted for a voluntary retirement scheme.
About 347 workers and 242 employees working in the processing house are still on the rolls.
The management had approached the labour commissioner with its proposal on April 10, 2003, stating that only 589 workers remained on its rolls and cited several other reasons for seeking a closure. The mill had accumulated losses of Rs 180 crore (Rs 1.80 billion).
"The Board for Industrial and Financial Reconstruction has also declared us as a sick unit and it is impossible to run the mill. On March 31, 2003, about 880 workers and 735 employees in the processing house opted for a VRS and they will be paid their dues in instalments over a period of time," the management said in its report.
On June 30, 2003, the labour commissioner granted its permission to shut down the unit.
Satish Chaturvedi, state labour minister, said, "Many of the mills are beyond redemption owing to huge accumulated losses. This makes it unsustainable for them to continue the business."
"Moreover, even the VRS package that these mills are willing to pay their workers hinges on their ability to sell a portion of their land first."
He added that the state had not issued any directive to the labour commissioner to have his orders (of permitting the closure of any manufacturing unit) ratified by the state government first.
"The commissioner is empowered under the labour minister's directions to pass orders under the prevalent laws."
"It was only informally communicated to him that such matters of closure should be informed to the minister's office during the pendency of the hearings. No directions were given to him. After all, his is a judicial empowerment," the minister said.
