Dear Experts
I have few questions on employee retrenchment:-
1. Is the “Industrial Dispute Act 1947” applicable to managers working in IT companies in Karnataka
2. Are IT companies legally bound to pay severance pay of 15 days per years of completed service (in addition to gratuity).
3. Is the applicability of (1) & (2) only in the case of mass retrenchment?. Or, will this apply to one of cases, where an employee is asked to leave the company due to performance reasons after completing service of 10 years.
4. Does disputes in the case of (3) be taken by labour court ?. Is there any argument in favour of the employee ?.
Any expert opinion will help.
Thanks - Sheen
From India, Bangalore
I have few questions on employee retrenchment:-
1. Is the “Industrial Dispute Act 1947” applicable to managers working in IT companies in Karnataka
2. Are IT companies legally bound to pay severance pay of 15 days per years of completed service (in addition to gratuity).
3. Is the applicability of (1) & (2) only in the case of mass retrenchment?. Or, will this apply to one of cases, where an employee is asked to leave the company due to performance reasons after completing service of 10 years.
4. Does disputes in the case of (3) be taken by labour court ?. Is there any argument in favour of the employee ?.
Any expert opinion will help.
Thanks - Sheen
From India, Bangalore
Managers are not workmen whether in connection with IT companies or not. But managers simply by designation will not make them out of ID Act protection. In order to be called manager, his functional responsibilities should be looked into. He should be having functional responsibilities of a manger like approving leave of his subordinates, initiating disciplinary action against them and or appraising their performance. If he satisfies these tests, naturally, he will not come under the definition of workman.
IT companies are not exempted from the operation of social security benefits like PF, ESI, Bonus, Gratuity etc and also they are covered by ID Act also. Therefore, in respect of a technical person to whom no person reports, compensation of 15 days pay for every completed year of service as provided in the ID Act is to be paid in order to terminate his service.
Compensation referred above applies to individual cases also. Moreover, while terminating an employee for non performance and that also after ten years of service, you should also follow the principles of natural justice. He should be subjected to a performance appraisal and the results of the same should be made known to him. He should be given adequate time to improve his performance. It should not happen all on a fine morning because in a day or two you can not declare an employee who has put ten years service with you as a non performer.
If he is a worker ( in IT companies normally all are designated as professional and I mean to stress that only those who have at least one reportee under him shall be called a supervisory or managerial employee) he can approach Labour Court against the order of termination.
Regards,
Madhu.T.K
From India, Kannur
4193IT companies are not exempted from the operation of social security benefits like PF, ESI, Bonus, Gratuity etc and also they are covered by ID Act also. Therefore, in respect of a technical person to whom no person reports, compensation of 15 days pay for every completed year of service as provided in the ID Act is to be paid in order to terminate his service.
Compensation referred above applies to individual cases also. Moreover, while terminating an employee for non performance and that also after ten years of service, you should also follow the principles of natural justice. He should be subjected to a performance appraisal and the results of the same should be made known to him. He should be given adequate time to improve his performance. It should not happen all on a fine morning because in a day or two you can not declare an employee who has put ten years service with you as a non performer.
If he is a worker ( in IT companies normally all are designated as professional and I mean to stress that only those who have at least one reportee under him shall be called a supervisory or managerial employee) he can approach Labour Court against the order of termination.
Regards,
Madhu.T.K
From India, Kannur
Community Support and Knowledge-base on business, career and organisational prospects and issues - Register and Log In to CiteHR and post your query, download formats and be part of a fostered community of professionals.
Employee Appraisal Form new.doc