Wrongful Termination Suit After Accepting Compensation: Is It Still Valid?

If the employer gives wages in lieu of notice, and the employee accepts it but later files a suit for wrongful termination, what can be done? Can the acceptance of compensation be termed as voluntary termination? Will such a suit be valid? Please help me.

No, since the employee accepted it and must have received a relieving and experience letter, such a suit would not be valid. Certainly, it would not be considered wrongful termination, nor can it be termed as voluntary termination.

I presume that the employer has not only given wages in lieu of notice but also has paid the retrenchment compensation due, calculated according to the provisions of the Industrial Disputes Act 1947. Your query is whether a worker who had received the notice or wages in lieu of notice can challenge his termination. This question was answered by the Honourable Supreme Court in the year 1964 itself. In Workmen of Subong Tea Estate vs. Subong Tea Estate [1964 I L L J 333(341)], the Honourable Supreme Court held that "Even if the workmen received compensation subsequent to the order of retrenchment, they will not be estopped from challenging the legality and validity of the order of retrenchment for there can be no estoppel against the statute." This judgment has still not been set aside. Therefore, in the case referred to by you, the worker can challenge the validity of the termination even after getting the notice pay and retrenchment compensation. If the retrenchment compensation had not been paid to the worker at the time of termination, the termination becomes illegal and could be set aside.

Suppose the terminated employee is not a workman and not covered by the Industrial Disputes Act, then how would the law treat this case?

Regards,
Kamal

It depends on the terms of employment/contract of employment, that is the appointment letter. If based on the appointment letter, the employee could establish that the dismissal is wrongful/illegal, he can seek a remedy. However, he cannot have recourse to the Industrial Disputes Act and has to approach a Civil Court for breach of contract.

In the case of the wrongful/illegal retrenchment/dismissal of the worker covered by the provisions of the Industrial Disputes Act, the law itself provides safeguards and also the procedure to be followed before retrenching. Such statutory protection is not available to an individual who is not covered by the provisions of the Industrial Disputes Act. They can sue for breach of contract. The Court may not direct the employer to reinstate the individual but may order damages.

Dear Apporva, No case law is needed in this case, as your acceptance of compensation in lieu of the notice period itself signifies your voluntary willingness to accept the decision of termination. Had you refused to accept the notice period salary/wages and filed a suit against the decision of the management or requested a stay order, only then would your refusal to accept the management's decision have been indicated.

The case pointed out by Ms. Apoorva is that the individual employee had accepted the wages in lieu of the notice period, and the issue raised is whether, after accepting the wages in lieu of notice, a suit could be filed. Of course, under the Industrial Disputes Act, a dispute should be raised, and a suit cannot be filed. The decision of the Honourable Supreme Court is a direct ruling on the issue raised by Ms. Apoorva. The Honourable Supreme Court highlighted the legal principle that there cannot be an estoppel against a law. This principle has been followed by several High Courts and the Honourable Supreme Court itself while deciding cases under various labor laws.

Regards

Hello all, Nowhere did Apporva mention that all the termination amounts have been paid. She has only mentioned the salary in lieu of notice. We cannot presume things in the absence of specific mention of other compensations and terms in the letters.

Retrenchment and Legal Rights

Normally, in the case of retrenchment, even if one accepts the payment, they are free to pursue their case for wrongful retrenchment. If it is a simple retrenchment (without any stigma), the case is different. However, with stigma attached, certainly, one is free to file a case. In that case, they have to conduct a domestic enquiry.

In both cases, a case can be filed, but in the latter case, the legal position is a little stricter.

Regards, Dr. Nagaraj

Dear Dr. Nagaraj, According to section 2(oo) of the Industrial Disputes Act 1947, the term "retrenchment" is defined as follows:

"Retrenchment means the termination by the employer of the services of a workman for any reason whatsoever, otherwise than as a punishment inflicted by way of disciplinary action, but does not include:

(a) voluntary retirement of the workman, or

(b) retirement of the workman on reaching the age of superannuation if the contract of employment and of the workman concerned contains a stipulation in that behalf,

(bb) termination of the service of the workman as a result of the non-renewal of the contract of employment between the employer and the workman concerned on its expiry, or of such contract being terminated under a stipulation in that behalf contained therein, or

(c) termination of the service of a workman on the ground of continued ill-health.

In industrial law, there are no categories of retrenchment. The Industrial Disputes Act 1947 does not classify retrenchment into simple retrenchment and stigma attached retrenchment so as to warrant different kinds of treatment by a judicial forum. The termination of the services of a workman for any reason whatsoever, excepting for those that are indicated as exceptions in section 2(oo), would amount to retrenchment.

I am interested to see this. I am posting from the United States, and our laws are a little different. Some of the requirements have to do with age and the Older Workers' Act. Among other things, this allows an employee (in the US) certain protections if they sign a severance agreement that can, but does not have to, include compensation. Generally, employees won't sign something if they aren't given something in return, so compensation is included. They have 21 days to decide to sign if they are over 40. In the case of a mass reduction in force (WARN), then it's 45 days for all workers. They will then have 7 days after signature to return any compensation and decide to sue. These are not considered voluntary terminations, but most of the time they are not terminations with cause. Termination without cause for lack of work or a reduction in force is sometimes used for discharges that have performance issue overtones, but I discourage that. If it walks like a duck, then it needs to be a duck. For executive terminations, there could be a settlement that occurs to defray potential legal liability.

In the USA, while we do have certain laws, the ability for the employee to fight the termination and stay employed is very uneven. By then, the relationship has soured. Unless it is a true Title VII Civil Rights Act violation or Hostile Work Environment situation, it's very difficult for the employee to fight and win an "unfair" termination. Unfair doesn't mean illegal. Therefore, in this country, it's not really the best option for the employee to try to sue instead of taking the settlement so long as it isn't a violation of their civil rights. If it is, I would advise them to go to the EEOC or a Civil Rights Attorney. Does India have such a vehicle to assist employees? Thanks for letting me share.

Dear Mr. Harikrishnan,

With respect to Mr. Kamal Prasoon Sinha's query, if an employee is not covered under the ID Act and approaches a Civil Suit for damages, how can these damages be calculated?

Example Scenario

The employee is now 41, and it's very difficult to get another job easily, especially considering the high current CTC of 16.55 Lakh. He has filed a case in the Civil Court and is demanding reinstatement as per the advice of the local lawyer.

After going through different threads of termination discussions in this forum, it has been learned that the Civil Court cannot order reinstatement; only damage charges can be claimed.

Factors for Calculating Damage Charges

So, please suggest what could be the damage charges considering age, seniority, and job opportunity.

- Basic Salary/Month: Rs. 52,220
- HRA: Rs. 26,110
- Supplementary Allowance: Rs. 26,110
- Conveyance Allowance: Rs. 800
- Children Education: Rs. 200

Total Salary per Month: Rs. 105,440 plus LTA - Rs. 52,220, Medical - Rs. 15,000.

He worked in this organization from December 2011 till March 7th, 2014.

Regards

Attribution: https://www.citehr.com/487029-retali...#ixzz32AXidtfW