Our company is downsizing due to financial issues. We have asked the employees to resign however few employees are not ready to do so. Is there any provision that the company may ask them to leave. The offer letter says that either party can terminate employment by giving two months' notice.
Imp thing to be noted here is that the company has not been able to pay salary for last 2 months. Company does not deny to pay however waiting for some funds. All dues including salaries + notice period + PF + TDS will be paid then. Company is ready to mention this on FnF statement.
As a HR person what solution do I have to ask employees to leave ?
Can it be mentioned in termination letter that this is due to financial implication ? Is it necessary to give a reason ? Simply mentioning that we revoke the agreement by abiding to notice period isnt sufficient ?

From India, Bangalore
Dear ssavi,
First you, as an employer, can not take shelter straight away under the termination clause of two months' notice on account of your downsizing necessitated by the present financial crisis.
Second, your establishment is covered by the Industrial Disputes Act,1947. As such you have to strictly follow the procedures laid down therein relating to retrenchment of surplus labor such as obtaining prior permission from the Govt. in the case of your no of employees is 100 or more, issue of notice or notice pay in lieu thereof,immediate payment of retrenchment compensation in addition to other terminal benefits like gratuity, leave salary, unpaid salary, unpaid proportionate bonus etc..
Third, if you are not to resort to retrenchment at your behest but expect the employees to put down the papers on their own, automatically it becomes resignation on voluntary separation. It would not be possible without granting some thing extra like additional compensation based on the years of service already rendered or yet to be rendered.
Therefore, under the above circumstances, don't venture to getting into deep waters simply based on the termination clause of the contract of employment.
At best, you invite the individual employees intended to be jettisoned or their union, negotiate and arrive at an amicable settlement for voluntary separation protecting the interests of both the management and labour.

From India, Salem

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