Legal Analyst, Hrm
Recruitment/talent Acquisition, Career Counselling
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.
24th November 2015 From India, Chennai
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...
24th November 2015 From India, Mumbai
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.
25th November 2015 From India, Jaipur
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.
25th November 2015 From India, Pune
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.
25th November 2015 From India, Delhi
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.
26th November 2015 From India, Hyderabad
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.
27th November 2015 From India, Delhi
Till now I haven't heard anything from the management regarding compensation. Further I have made my mind to leave the organization if they agree to pay the compensation so I have sent a mail stating "In reference to the various discussion held with the management i would request you to kindly pay me two months salary in lieu of my notice period as I have my family to look after while I would be looking for another employment opportunities after my resignation with the company.Thanking you for your kind consideration of my above request." In order to move the dialogues in that direction.
I have not got any response to this mail..kindly suggest me what should I do next ?
3rd December 2015 From India, Jaipur