Labour Law & Hr Consultant
Partner - Risk Management
Labour Law Advocate
[email protected]
Business Transformation
+1 Other

Cite.Co is a repository of information and resources created by industry seniors and experts sharing their real world insights. Join Network

My current company has given a prior notice about the layoff on 2nd December, 2016.

Reason: Shortage of project.

1. HR team has informed us that, "FnF will be on 31st December, 2016. Till that time, no need to come to office. We can search for a new job meanwhile and December's salary will be paid after 10th January. After completion of the FnF."

2. The issue is on the severance payout. As I knew, if there is notice of 2 Months (mentioned in the OFFER LETTER), they should have notified us Two Months earlier or they should pay the severance of 2 Months. (December & January).

However, few of us approached to the Management and HR team in regards the same, but they're not ready to entertain and providing negative responses.

Please help me on this to understand in better way, was our approach wrong to the Management/HR Team? If the answer is positive, then what will be next course of action should I take to make them agree on this?

I will look forward to hear from you. Appreciate your support!

From India, Bengaluru
Dear Parvez,
Certain important particulars are missing.
1) What is the nature of your Company - manufacturing unit, service industry coming under the Shops and Establishment Act etc.,?
2) What is the total no of employees falling within the definition of "workman" under the ID Act,1947 on an average during the last 12 months from the date of issue of the notice?
3) Whether all the employees including yourself served with notice of retrenchment ( that's what actually the legal meaning of what you've mentioned as lay-off) are workmen or officers of predominantly supervisory capacity above the monthly salary of Rs.1600/- or of managerial capacity?
These are the vital informations based on which only appropriate answers can be suggested for further action.

From India, Salem
Hello Umakanthan,
Glad to receive your response following the same.
Hope these information will help.
1. Nature of the company - Internet Digital marketing and software services.
2. Total Number of employee -300 to 500
3. About the notice - they have laid off 17 employees on October from the same project/unit. Now they have intimated 5 employees including me.

From India, Bengaluru
Dear Parvez,

I understand that yours is an ITES Company coming under the State Shops and Establishment Act. From the particulars furnished, it is an industrial establishment subject to the provisions of Chapter V-B of the Industrial Disputes Act,1947 in respect of Lay-Off, retrenchment and Closure. Therefore, the Company has to get prior permission from the Appropriate Govt before resorting to such manoeuvres affecting the employment of its employees falling within the definition of the term " workman " under the Act. If not the orders of retrenchment will be illegal.

Unfortunately, the higher academic qualifications, sumptuous salaries, catchy designations, higher degree of employability both at home and abroad etc., make all the employees in the field that they are not workmen and particularly leave the HR people of IT and ITES organizations to the misconception that their organizations are above the Labour Laws of the country. Even they refuse to accept that the contract of employment is a contract under the Indian Contract Act,1872 and its unilateral termination has to be strictly according to its terms and conditions failing which they are liable to pay damages in the event of the affected person moving the Civil Court.

Irrespective of the amount of salary all employees doing their work under the supervision and control of their superiors are workmen as defined under ID Act,1947. All other employees predominantly employed in supervisory capacity above the monthly salary of Rs.1600/- and in managerial capacity are "persons employed" under the State's Shops and Estt Act and as such their services can not be terminated without prior notice and sufficient reasons.

Therefore, likely to be affected employees falling under the definition of "workman " may approach the labour officer for the area and make a complaint before hand or even raise a dispute individually u/s 2-A(1) or 2-k of the ID Act,1947 either themselves or through a trade union of general employees after retrenchment..

Others can prefer an appeal under the State Shops and Estt Act before the Appellate Authority designated under the Act or institute Civil Suits against the management for damages after their termination.

From India, Salem
From the above details, it seems you will fall under the category of workmen under the ID act and hence, the approval of government is required for retrenchment on 'last come first go' basis. Retrenchment compensation has to be paid to you also.
From India, Kolkata
Hi Parvez

Umakanthan sir has given a detailed explanation.

First, what you are talking of is called retrenchment under the law and not layoff. Layoff has a completely different meaning, which is that you are given a temporary suspension from work for a specific period due to management issues (meaning not your fault).

so the company has 2 options - terminate, retrench or get your resignation.

The last is the simplest for them because they are not liable for compensation.

For termination, they have to give reason, and shortage of projects or work is not a reason. You can read other threads here about procedure for termination (if you are curious about it), its widely discussed.

In case of retrenchment, again they have to follow a certain procedure. The newest employees have to be removed first. And each employee is eligible for compensation of 15 days salary for every year worked with the company. This is apart from standard notice period salary (2 months in your case) that is stated in the appointment letter and available in all of the 3 scenarios.

If you want to fight, you can do so.

The method is already give to you in earlier posts by my seniors on the forum

You can point out to the HR team that you know what the law is and with file a complaint if they dont give you the proper notice pay at least. In many cases, if the HR is smart, they will give you the full notice pay and close the matter.

On the other hand, if you do get a job easily, just take a clean relieving and move on, because your next employer will want to do a background verification and the current company will definitely give a negative if you have fought or threatened them.

From India, Mumbai
I am experiencing a similar event now. My company is an ITes UK based MNC and I have been asked to resign effective immediately. My company is offering me 2 months notice, as signed on the offer letter, but it includes 1month salary payout followed my 2nd month's pay as F&F which can be expected in 60 days. The reason provided is my profile is now required in UK and not India. I have stayed at UK and South Africa doing project management for my company previously, and work as Project Manager. However, they are not listening. My company has close to 500+ employees and has this culture of firing people with such reasons. We do not have any severance clause or entrenchment policy and one of the business heads was fired last year with a false reason. When he cited taking legal action, they paid him 3 months severance check on the spot and relieved him off all duties in one day.
I returned from South Africa in last week of May and was planned to travel to Cape Town next month on company's project and have got my VISA and all sorted. The client pays for me a daily rate of 500 Pounds/day to my organization and have contractually agreed to have a Project Manager in SA for all of 2017. There is no resource in SA however, I have been told to leave effective immediately as the role is now redundant.
Please advise. Similar incident has happened to another colleague of mine who has been asked to lay off immediately.

From India, New Delhi
This discussion thread is closed. If you want to continue this discussion or have a follow up question, please post it on the network.
Add the url of this thread if you want to cite this discussion.

About Us Advertise Contact Us
Privacy Policy Disclaimer Terms Of Service

All rights reserved @ 2020 Cite.Co™