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Dear Sir,

With reference to the captioned subject, I require to know whether an employer can withdraw benefits of the employees?. Kindly provide relevant provisions in the statute (Labour laws and new Labour Codes) and also provide Judgment of Supreme Court if any on the issue


Mayur P. Kulkarni

From India, Mumbai
Dinesh Divekar

Dear Mayur P Kulkarni,

While raising the query, I wish you had mentioned what benefits your company provides to the employees and of those which ones you wish to withdraw or retain.

Occasionally business organisations pass through rough weather. For the sustenance of the organisation and to reduce expenses, the organisations withdraw the benefits provided earlier. There is nothing wrong with doing so, however, please take employees into confidence and explain to them clearly why the withdrawal became necessary. If the conditions under which the decision is taken are not communicated clearly, there could be backlash and the decision could do more harm than good.

Please note that in many companies, statutory obligations like PF, ESI, Gratuity etc. are called "benefits". However, please note the difference between "obligation" and "benefits". The latter is over and above the former and providing these is a prerogative of the company's administration. Statutory obligations have to be fulfilled however financially bad the condition of the company may be.


Dinesh Divekar

From India, Bangalore

Existing benefits will be part of service conditions of employees. The employer can withdraw such benefits ONLY by giving a notice as per section 9A of the Industrial Disputes Act.
From India, Kannur
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