For manpower cost cutting, can we opt for taking resignations by asking employees to do so. What should be the right practice to reduce manpower as per Law. and if opt as aforesaid what will be the negative/positive !!
From India, Delhi
Partner - Risk Management
Ceo-usd Hr Solutions
Hr Freelancer

The answer varies with the circumstances

Please give the complete details and background (and your position in the company) if you want people to give the right answer.

Or this looks like an interview question you are trying to get someone else to solve for you

From India, Mumbai
It is looking like a query for an interview as said by our colleague.
Requesting all querists once again to put their query in properly and in detail to provide reasonable, logical and legal response.
The above question from our colleague is like a fill the blanks type, which should be discouraged in this forum for the benefit of our fraternity.

From India, Hyderabad
Sorry for delay,

In fact, recently, company has been taken over by new entity, and new Management is asking to maintain the manpower cost within the budgetary level, actual cost is coming over & above the budgetary level. Manpower is also extra in few of the sections. Management is expecting cost cutting at the earliest possible and we have been asked to get resignations from the unwanted extra employees. We have prepared about 100 employees list. But before initiating, I wish to seek possible negative impacts, that I feel company may face in future if we take resignations from the employees against their wishes. We have been asked to take resignations from all the employees politely. Company is ready to pay extra after discussion with the employee.

Company is running in profits currently.

Suggest the best way out pls. that can be put before the management.

From India, Delhi
There is a famous saying "Golden hand shake" which is voluntarily resignation scheme. Draft one VRS as per guide line of Income Tax Authority and up to 5 lakhs will be ITAX rebate if I am not wrong.

Share the same with the targeted employees and as the organization is making profit at present, try to design one scheme( VRS ) where employees can get maximum amount ( more than 5 lakhs) as terminal dues other than statutory dues - PF, Gratuity, Leave pay etc.

S K Bandyopadhyay ( WB, Howrah )
CEO-USD HR Solutions
+91 98310 81531

USD HR Solutions – To Strive towards excellence with effort and integrity

From India, New Delhi

Think from the employee's point of view and you will get your answers without anyone's help.
Why will the employee give a resignation? Who will want to give up a job voluntarily? And why?
Unless there is an inducement, no one will leave a job where they are getting paid a good (or reasonable) salary and getting paid on time and have a reasonable workload.

Can you actually call 100 employees (even individually) and tell them just resign? Why will they listen? If your organisation is large enough, Industrial Dispute Act, Standing Orders, etc, applies and you can not just remove people at will. You will need to go through the process, hold domestic enquiry, find reasons for removing them.

In case you did not know, even in TCS, a software engineer has been reinstated by the courts with 7 years of back wages. If anyone goes to court or to the labour officer, you will have a problem.

As Mr. Bandyopadhyay stated, give a VRS (though from what you have said, I seriously double if your new management will approve spending that money). If you can't, there are various other ways, best of which is to expand the business to ensure there is enough work for using their skills or wait for people to leave on their own and don't recruit in their place.

Both are long term solutions, not the short term ones your bosses are asking for.
I have seen some cases where company has created a bad working environment or has let it know that they will cut manpower and many people automatically left. However, it is a bad practice and I wouldnt recommend it. If it works, it will be the best and most efficient of your people who will leave and you will be left with the inefficient. Even there, you can get into trouble with the courts, though if you are not careful.

From India, Mumbai
Golden Hand Shake is best way. Why not to go for Retrenchment with some better compensation then legal as said above is right way
some 15 days or one month salary /per year of service you can decide with negotiations, it will be a win win situation.

From India, Ahmedabad
Mr. Garud,
Retrenchment is always on LIFO basis. They may not want to remove the cheaper or younger manpower but instead they probably want to remove the older ones. (I am guessing, not stated in the post anywhere)

From India, Mumbai

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