Can Employees Seek Compensation When IT Companies Downsize Due to Global Issues?

Hello All,

I wanted to know that in the current scenario, IT companies are downsizing, and many employees are being asked to leave their jobs. I wanted to know if an employee can ask for monetary compensation for the same, as it is not due to their poor performance that they have to leave the job, but rather due to the company's business not doing well because of the global scenario.

If the employee can do so, what is the procedure, and how much compensation can the employee get from the employer? Are there any laws to protect employees' interests in such a scenario?

Regards,
Reena

Hello,

Does that mean that the employer has all the rights to do it at his own will, and there is no law to protect the interests of the employee? So, IT companies must be safe in handling the retrenchment.

Regards,
Reena

Dear All,

Retrenchment process in downsizing is an eventuality. The definition of "workman" for IT professionals has not been tested so far. When the numbers are high and they don't perform Managerial Jobs, focusing solely on software development, they can be treated as workmen, and the Industrial Disputes Act may be made applicable. In that case, they may have to seek Government's permission for retrenchment.

In the scenario of job availability and easy switchover, you are less likely to face Employment Litigation. However, in a changing environment, Litigation may eventually arise, and the definition of workmen will be tested. Regardless, one cannot exclude the application of the Shops and Establishments Act, which also provides protection against unlawful retrenchment.

With Regards,

V. Sounder Rajan

E-mail: rajanassociates@eth.net