Legal Analyst, Hrm
Kumaran Praveen
Hr Manager
Insolvency N Gst Professional
Recruitment/talent Acquisition, Career Counselling
Ashutosh Thakre
Hr Professional
+2 Others

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I am working in an private firm which is going through restructuring and facing financial crisis. As a result my new boss had asked me to report at HR department where they were going to assign me new task but to my surprise they started to explain me the bad condition company is going through and asked me to look for options verbly. After few weeks senior HR members asked me to resign and told if not they can even terminate me.
After that till now no communication has been made by them. In 3.5 years with the company till now I have not received any kind of notice for misconduct or anything instead I was promoted last december.
There is nothing mentioned about notice period in my appointment letter and I termination clause it is written that if I am found doing any kind of fraud or misconduct then they can do so with immediate effect.
Kindly suggest what should I do
Neeraj poddar
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Hi Mr.Neeraj,

Organization are allowed to retrench their employees due to financial crisis under the law however they should give 30 days notice period in case your organization employing less than 100 workers by mentioning the reason for retrenchment or they can pay 30 days pay in lieu of notice period with compensation of 15 days salary of each completed years.

In case your organization employing more than 100 workers than it should get permission from government to go for retrenchment and they also give 3 month notice period by mentioning the reason for retrenchment or they can pay 30 days pay in lieu of notice period with compensation of 15 days salary of each completed years.

In both the case,your employer has to follow the principle of LAST COME FIRST GO, which means who joined last has to be retrenched first however there is exemption for workers who possess high skills.

Whether it mentioned in the offer letter or not, your employer has to follow the above said provision and principle.

With Regards

Mr.Thumbs Up
Dear Neeraj,
Mr. Praveen as well explained the procedure the company needs to follow, but would the company stick to the same is a question mark. You always have an option of moving the labour court, but the matter will take a long time to be heard and settled. Till then, even if you join the new organisation, would they give you leaves to attend the proceedings?
So, thou you have all the law with you, do you have to follow the righteous path till the logical end, is the bigger question.
In reality, look out for greener pastures and move ahead...
Ashutosh Thakre
Dear All,
Thanks a lot for providing in depth information on my issue.
As i have mentioned earlier they have not made any further communication yet.
Should i go and directly ask for 30 days pay in lieu of notice period with compensation of 15 days salary of each completed years and resign or should i wait.
Will they give me any written confirmation regarding 30 days pay and compensation.
Best Regards
Neeraj Poddar
If I was in your position,I would look around for jobs.
I will not resign immediately and wait for developments on termination front.
In case of termination without following due procedure give them a legal notice of moving Labour court But necessarily need not really go to court.Fact of moving court may make the company pay you compensation(though they are in money trouble).
But then you know the ins and outs of your company and should decide carefully about your actions.
Dear Neeraj,
If company is really in financial trouble, honourable exit by maintaining goodwill and mutual trust is much more valauable than 30 days pay and/ or compensation. With friendly exist, even the company bosses may prove to be helpful in finding some good job or in development of your career through some other company.

Dear Sirs, I am not convinced with their excuse of financial crisis as they are hiring new people for the same work. Its more like of Politics for higher management. Regards Neeraj Poddar
If they are targeting you there is no point in remaining in such company. You will feel that they are causing you harassment. better to look for some other job... A S Bhat
Hello Neeraj Poddar,
Vis-a-vis you line 'I am not convinced with their excuse of financial crisis as they are hiring new people for the same work', pl note that this MAY NOT necessarily mean that there is no financial trouble.
Many Companies hire new faces to bring down the wage bill......since unfortunately, as of today, Companies CAN'T just close the door.......the only way [from THEIR perspective] to keep the door open but yet curtail the costs is to pack-off costlier people & hire lower-cost people for the same job.
Any way you look @ this situation, the only option you have is to move-out ASAP. Begin to look for new jobs.....and ALSO suggest keep the HR informed of your efforts. Else, under the impression that you ignored their request/instruction/orders, they might terminate you BEFORE you are ready for it.
And like Nathrao mentioned, going legal is ALWAYS an option in any situation, including your's. But it's NOT necessarily the BEST/RIGHT option always.
All the Best.
If not convinced, you can feel free to fight for your cause. But, your own assumption about non-existence of financial trouble to the company should not be the basis for your convincing merely on the ground that the company is hiring new people. Better form your opinion only after going through their Profit & Loss Statement and the Assets & Liabilities depicted in the balance sheet of their annual account.
It is not necessary that fresh recruitments have to be made only for the replacement of the existing staff, but can also be for damage control or crisis management, of the company depending upon the qualification, expertise & competence of the new candidates.
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