Scheme for Financial Assistance to the Workers in Locked Out Industrial Units

Labour Department

No. 506-IR Dated: 14.05.98


The question of providing some financial relief to the industrial workmen who are out of employment due to prolonged lock out/ suspension of work/ closure of industrial units in the State of West Bengal has been receiving attention of the State Government for some time past. After careful consideration of the matter and the limitation of the State Government in respect of resources available and the powers conferred to it, the Governor has been pleased to introduce a scheme viz. “Scheme for Financial Assistance to the Workers in Locked out Industrial Units (FAWLOI)” with effect from 1.4.98. The Scheme is as below:


In the sphere of closed industries, the main policy thrust is on re-opening of the closed units. A provision of Rs. 50 Crores has been earmarked in this year’s State Budget to facilitate such re-opening of Cloted Units. Along with this thrust, a separate provision of Rs. 50 Crores has been earmarked with the objective of providing some financial relief to the workers who are out of employment due to alleged closure of industrial units in West Bengal. The financial assistance to the workers is intended not to compensate for the loss of income but to extend some relief to the workers affected by prolonged lock out/ suspension of work/ alleged closure of industrial units in West Bengal. The eligible workers would be entitled to a cash assistance of Rs. 500/- per month with effect from 01.04.98. The salient features of the scheme are as follows:-

1. Industrial Units to be Covered under the Scheme:

(i) The industrial units should be factories and plantations registered under the Factories Act, 1948 and the Plantation Labour Act, 1951 in West Bengal;

(ii) The industrial units have been under lockout/ suspension of work/ alleged closure for more than one year on 31.03.98;

(iii) Such units have been in operation for more than five years prior to the incident of such closure;

(iv) Though closure order/ winding up order/ liquidation order has been passed in respect of a unit by BIFR/ Court/ Tribunal, the same has been challenged in the appropriate legal forum:-

(v) State Government is the appropriate Government for the units under the Industrial Disputes Act;

(vi) The unit is one which has had regular production activities and not a seasonal one.

(Note: If a Unit has branches in different states, workers in West Bengal only will get the benefit.)

2. Screening Committee for Selection of Units and Procedure thereof:

The State Government will constitute a committee for selection of the industrial establishments that are to be covered under the scheme. The committee will also advise the Government from time to time in the implementation of the scheme. The Committee will consist of the following members:

(i) Labour Secretary – Chairman

(ii) Secretary, I.R. & P.U. Department – Member

(iii) Special Secretary, Finance Department – Member

(iv)-(ix) Six representatives of Central Trade Unions – Members

(x) Labour Commissioner – Member

(xi) Chief Inspector of Factories – Member

(xii) Director, ESI (MB) Scheme Member

(xiii) Joint Secretary, Labour – Member-Secretary.

While the Committee will examine the records of the Labour Directorate and the Factories Directorate to identify the units, registered Trade Unions may bring to the notice of the Committee the names of such units which they feel should be included and these will be considered in the light of the conditions of eligibility on the basis of available records and necessary enquiries.

3. Eligibility of Workers:

On approval of the industrial unit(s) by the Committee, the Labour Directorate will issue notice(s) to this effect. On issue of the notice(s) by the directorate, the workers of the approved unit(s) become eligible to be covered under the scheme.

3.1. In order to get the benefit under the scheme a worker in the unit has to satisfy the following conditions:-

(i) The worker should be a regular workman on the rolls of the factory, plantation, other administrative offices of the company who has lost wages due to the lock-out/ suspension of work/ alleged closure;

(ii) The worker should have worked in the unit continuously at least for a period of one year prior to the alleged closure;

(iii) The worker shold be a workman under the Industrial Disputes Act;

(iv) He has not retired/ resigned/ voluntarily retired/ accepted a scheme of separation and has not accepted terminal dues pursuant thereof;

(v) The worker has hot crossed 58 years of age on the date of application

3.2. The benefit will not be provided to workers in following cases:-

(i) If the worker is in employment in the same factory even if the unit is closed; (e.g. Security staff, maintenance staff);

(ii) If the worker has retired/ resigned/ voluntarily retired and has accepted terminal dues or has been dismissed/ terminated as per law;

(iii) If the worker is gainfully employed;

(iv) If the worker has taken pension from the Provident Fund Organization on attaining eligibility or is in receipt of commuted pension.

3.3. Benefit under the scheme would be discontinued in the occurrence of any of the following events

(i) On the Unit re-commencing its operations;

(ii) On the death of the worker;

(iii) On die worker attaining the age of 58;

(iv) On the worker accepting the terminal benefits under any offer of separation, retirement or VRS;

(v) On the worker accepting pension or commuted pension from the PF authorities;

(vi) On any of the conditions of ineligibility becoming applicable.

Applications for Benefits and Preparation of Lists of Beneficiaries:

1. Application: On approval of coverage of a unit under the scheme by the Screening Committee, the Labour Directorate will issue notice(s) inviting applications from eligible workmen of the unit. The notice will mention the place, and the period during which such applications will be received. The eligible workmen would be required to submit individual applications in the prescribed proforma to the designated officers, (who normally would be the ALCs/ DLCs of the districts/ regions), along with an undertaking on the fulfilment of eligibility criteria.

2. Lists: On receipt of the applications, the Labour Directorate will make necessary inquiries to verify eligibility of the workers. In doing so, the officer has the right to verify the claim with the records of the PF authorities, ESI Corporation etc. and also conduct local inquiries. He could also take evidence of the concerned trade union leaders in the factory or others to determine the genuineness of the claim. After verifications, a consolidated list in respect of all workers in a particular factory will be prepared by the Labour Directorate. The list of beneficiaries shall include the names and addresses of the applicant, identification number and the name of the bank and branch where the account is to be opened. A copy of the list will be sent to the branch of the bank where the- accounts are to be opened.

3. Method of Payment:

(i) The eligible workers would be entitled to the cash benefit of Rs. 500/- per month. The benefit will be provided unless it is terminated by the application on any of the events of disqualifications outlined in the scheme or any modification by Government Order.

(ii) The workers will be paid quarterly and the payment will be made through banks, wheredhe workers would be asked to open accounts.

(iii) This would imply that all the workers whose names appear in the lists approved by the Labour-Commissioner would be required to open bank accounts in specified branches of nationalized banks.

(iv) For the sake of convenience, all workers of a factory would be asked to open accounts in the same branch.

(v) The Government would sanction an amount of Rs. 100/- initially as additional amount to the workers to enable them to open the accounts in view of their indigent condition that would be directly sent to the banks along with the lists.

(vi) The amounts will be remitted to the concerned bank branches by means of a cheque for the consolidated amount of along with an authenticated list (in duplicate) and amounts to be credited. The bank, on crediting the amounts to individual accounts will return one copy that would serve as the acquittance roll.

6. Management of the Scheme:

A cell will operate in the Labour directorate with suitable officers, supporting staff and other facilities to administer the scheme.

The State Government will, from time to time, review the working of this scheme and take such steps as considered necessary.


Ordered that a copy of this resolution be published in the Official Gazette and a copy of the same be sent to Labour Commissioner, West Bengal and all Central Trade Union Organisations.

By order of the Governor,

Secretary to the
Govt. of West Bengal

No. 506-IR dated 14.05.1998, Source

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