Is It Constructive Dismissal in India When Changes Force You to Resign? Seeking Insights

Hello Everyone,

Would either of you be aware of the application of "Constructive Dismissal" under Indian laws?

For example, while a company may have a severance clause as per the contract, which under circumstances where an employee tenders his resignation, the severance terms become inapplicable. What would the employee's recourse be if such a situation is created (significant changes in the org structure, downsizing of role, etc. - NOT performance-based)? Can this be deemed as Constructive Dismissal under Indian law, whereby an environment is being created that forces the employee to resign from his/her services?

I read it as 'constructive discharge' and not constructive "dismissal".

The Industrial Disputes Act has provisions relating to such discharge/retrenchment of employees. The only thing is that before doing so, the employer should inform the government of their intention to retrench employees as a measure of downsizing due to a lack of work orders. In case the employer has a workforce of more than 100 employees, prior approval from the government shall be obtained for such retrenchment. Certainly, permission to retrench service shall be granted if the government is satisfied with the reasons stated by the employer and if the government also believes that downsizing the workforce will help the employer to continue their venture, which would otherwise lead to a lockout.

Under any circumstance, the employer is liable to pay retrenchment compensation to the employees who are retrenched, which will be equal to 15 days' salary for every year of service. In addition, the employee shall be served a notice of retrenchment so that they can find alternative employment. Otherwise, pay equivalent to the days of notice shall be paid.

In case the employer goes for retrenchment, it should also be ensured that the employee who joined the company last should be the first to be retrenched.

When the above provisions are available to the employer, why should they demand resignation from the employees who are unwanted as per their list? If they do so, certainly, their actions will be termed as 'unfair' practice.

Regards,

Madhu.T.K