Industrial Relations And Labour Laws
General Manager-hr
Employer Branding, Marcom, Talent Acquisition;
Pranay Patil
Manager Human Resources
Job - Hr And Admin
Hr Manager
+3 Others

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We were working for an US company and they shut down the company by filing bankruptcy.. We were not given any notice or intimation about the shut down in advance. They have paid us the salary for that last month..
All the employees who are questioning me about the compensation for not giving prior notice. Please let me know your suggestions on the liabilities and procedure to claim compensation if any from the employer who is in the US. Your ideas will help the employees who are left jobless..

Employees should look of alternate employment opportunities and NOT expect a compensation for NOT providing a notice - Please see if this article help you in any manner: Bankruptcy
Due to lack of time I was NOT able to do much research on your question, please do not consider this as ignorance and kindly oblige. However you have raised a brow and a thought that we need to have more knowledge in dealing with such situations.

If they appeal in indian court, they will get all compensation as well as jobless time period payment. Regards PRANAY
They haven't cleared the PF and ESI dues for that month... We don't have an employer to sign the claim forms and no one had submitted the returns for the current fiscal year...
Will the EPFO take necessary action against the US employer ? ......

Since they have filed for bankruptcy in US..they need to do the same in India as well u need to inform the Registrar of Companies or may be Labour Office for the same (Pls check). You cannot terminate the employees like this even if your company has become bankrupt there are minimum obligations you need to fulfill if any employee approaches that you have fired them without sufficient notice and compensation your company can be in trouble….
registered under which act? also if over 100 employees would need to file and gain approval for retrenchment prior to dismissal joseph
Registered Under the Companies Act of India and the employment strength is less than 50.... Its 36 approx
Hi Mike,

Like to inform you that, once I asked our PF consultant about the same case & they told that if the company get shut & employees willing to withdraw there PF money then they can take authorized signature of any high post govt employee, CA, Lawyer etc…

I think you should find out this from PF office.

Hope this will help you & your employees…


Dear Friend,Any firm should not be closed simply. First you have not clearly mentioned about the details of your firm. Is it registered as per companies act.? Who is the principal Employer since you say it it MNC. If you are an MNC is it registered as a Contractor (either principal contractor) with any local Labour department ? Are all the employees covered under PF / ESI act ? If such case there is procedure to closing down the organisation.For this please go through the attachment.Regards,PBS KUMAR

Attached Files
File Type: pdf know_about_closuing down the firm.pdf (321.5 KB, 1053 views)

Closing down of an establishment employing 36 will not require much complicated procedure. Moreover and since the employer has been adjudged insolvent (or is about to be adjudged insolvent) employees may not be able to find any way out. The Administrators appointed by the Court (in US) will decide the amount to be paid to each employee. However, since the company is registered in India, the relevance of insolvency petition in the US will have to be studied with reference to Companies Act and Insolvency Act in India. Whatever be the provisions, the matter will take time to settle.

As pointed out by the aggrieved, it is not the sole responsibility of the HR Manager to pay the compensation to the employees. Definitely, being an HR Manager, you have to ensure that all dues are paid to the employees. But at the same time if the Finance Department does not take initiative how can an HR man disburse the amount? The decision to pay compensation etc should come from the Board of Management delegated through Finance Deptt to HR.

I feel with the depression and recession in the US many employees are going to be retrenched. This is not a micro level issue but a national issue. Therefore, some kind of ruling from the Labour Ministry is required to enacted to rehabilitate those becoming jobless. When employees of Indian Companies get protection why don't employees of MNCs? Let us hope for the best.



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