Dear members,
Originally the thread was raised in 2009 by a member who worked in UAE. With the latest reply from the member from Zambia, it has been revived.
In India, at the time of issue of the appointment letter, terms of separation of defined. In case if the employee is required to be removed, he/she is given notice for 1-2 months. Sometimes employers pay in lieu of the notice period. Therefore, what is referred in the thread as "redundancy pay" is referred as "notice period pay" in India.
If the workers are required to be removed en masse then it is called as retrenchment. Industrial Dispute Act, 1947 has defined what is retrenchment the procedure to execute the retrenchment.
However, the above discussion was only with respect to the law. From the management science point of view, insolvency in business is failure of the business strategy, business planning etc. An enterprise has to pass through rough weather, however, what the owners had done to anticipate the risks? Certain risks can be averted, certain risks cannot be averted but mitigated and going further certain risks can neither be averted, not mitigated but we have to just respond to the risks.
Most of the time, corporate decline is a result of the strategic failure. If the strategic plan is well in place, if the tools of the strategy are used properly, then it is possible to avoid workers' redundancy and payment to them!
Thanks,
Dinesh Divekar