Sandra D'souza

Dear All, We are an event management company based in Goa. During the current COVID - 19 scenario, we have no events happening and therefore there is no revenue and the company is unable to pay salaries to employees.
In this scenario, is it OK to terminate few employees until the situation becomes normal? Are there any directions from the government with regards to this? Kindly advice. Thank you.

From India, Nagari
Labour Law & Hr Consultant
Seasoned Ir Professional
Hr Manager
International Corporate Trainer / Hr (od)
Bhartiya Akhil
Deputy Commissioner Of Labour..a.p.
Associate Director Legal
J S Malhotra
Ex-group Sr Manager (hr) Nhpc
Management Consultancy


The Government Directives dated 29th March 2020 are under challenge before the Supreme Court and the verdict is expected this week. So you may await the same.
But let me tell you, things are going to be different after post Corona and you need to find out of the box uses of your core strength to remain floating in the market.

From India, Mumbai

Dear Sandra,
The Central Government's advisories under the DMA, 2005 have not been stayed by the Supreme Court except for taking any penal action against non-payment of wages only.
In my opinion it would not be reasonable to compel any employer to pay wages to the employees when his business operations are shut down indefinitely under statutory directions by the State. Some of the European countries have come forward with up to 80% reimbursement from the Exchequer towards salaries of employees affected by the lock down. Therefore, I would also recommend to await the verdict of the Court.
However, you may try for a negotiated settlement with your employees to avoid any legal issues later.

From India, Salem
J S Malhotra

Dear Sandra!
Restrictions imposed earlier, due to lock down has been relaxed / lifted in majority of the cases. However, to get to the previous status quo (i.e. pre-lock down / pre-COVID), it will take a long time. Hence, normalcy is not seen nearby, but it will certainly improve gradually.
So far as, termination of your employees are concerned, in view of the non - flow of funds, it will depend on the manpower requirement, keeping in view the present scenario vis-a-vis their terms of employment/statutory provisions, if any.

From India, New Delhi

Now Central Government is not stringent (w.e.f. 18/5/20) in complying with their earlier direction to keep all company employees by paying full wages. Now Supreme court has issued an interim order of not to take any coercive action if employer/company fails to comply with Government's direction.
Hence matter is left to company/employer. Considering the fast spreading pandemic Covid-19,
and if your financial capacity permits, you may keep your employees. Else you may temporarily
suspend their services by giving an assurance that, once the situation improves, they will be
absorbed back into the rolls of the company, so that they may be at ease.

From India, Aizawl
Anthony Constantinou CEO CWM FX

Definitely not, everyone is suffering and when people suffer from money loss, they have no other way to live normally
From Portugal, Lisbon

Dear Sandra,
Take your own decision, if carry forward is not sustainable further. There is a way out to follow the route of ID Act for retrenchment & lay off . The Govt would not issue any such guidelines in support of termination of employee by the employer. However, you need to discuss with the employees and detect your term, if required negotiate for an end result. I do not see that the apex court would come with any possible solution but recommendations would keep everyone safe from action.

From India, Mumbai

Are you really looking at employees as the major cost during this Crisis to survive.
No! Employees are hard to find, and the skillset is difficult to retain too.
There are lot of them doing this mistake trust me to get them back you need to spend double the time and money as well as the brand image is lost with these kind of activities.
Alternatively you can:
Do a Paycut
Look for other areas to cut cost
Try to give them a sabbatical leave - with little help from PF and other compensations.
This will give them a family feel as well as helps you get them back when things are back.

From India, Bengaluru

Yesterday the Supreme Court has given an order, which is also an interim direction, asking the employers to discuss with the employees. The Court has beautifully washed the hands putting the burden on the employers. Now we can not expect the court's help but we have to find our own possible ways, that is simple, have a settlement with the employees. For the employers, paying two or three months' salary without any revenue will be challenging but it is more challenging for an employee who may be a breadwinner of a family consisting of five or six people to make the two ends meet without any salary. In this particular situation, if you think that no work no pay is commonly accepted slogan, then the people in the other side will not be available to generate income for you when the things become better. They cannot ask for any help from others expect you. It is your responsibility to pay at least an amount equal to their survival.

Foresee a situation that when they fail to get justice from you when they request individually, they may unite and collectively BARGAIN! Then you will be in big trouble. In my experiences, it is not the employees who form trade unions, but it is the employers who form trade unions or make the employees to form it! Never create a situation wherein they start demanding collectively. Consider them as part of your capital and treat them like that by paying at least a subsistence pay and keep them along with you.

From India, Kannur

Further to the comments of learned members, I would request you to
please read earlier thread ref. :

From India, Aizawl

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