Facing Bankruptcy at Work: How Can Employees Secure Their Dues and Rights?

I need serious help here. My company is a Private Ltd and managed by their own family member. The company is going towards bankruptcy.

Employee Role and Concerns

In the above case, what will be the employees' role? What are we supposed to do? We are not getting salary, bonus, or leave encashment on time.

If we give the resignation, then we do not know when we will get our dues (gratuity, full and final settlement).

Waiting for Bankruptcy

If we wait until bankruptcy, then what will happen? In that case, if we approach the Labour court, then what? What kind of compensation will we get?

Claiming Dues and Compensation

So, I want to know how we can claim all of the above.

a. What are the legal formalities involved in this?
b. From where to start the procedure?
c. Where to read the laws governing a company insolvency in India?
d. How can employees claim the dues, compensation, and complete all the necessary legal formalities?

I need serious help here. My company is a private limited company managed by their own family member. The company is heading towards bankruptcy.

Employee Role and Actions

In the above case, what will be the employees' role? What are we supposed to do as we are not receiving our salary, bonus, or timely leave encashment?

If we resign, we do not know when we will receive our dues (gratuity, full and final settlement). If we wait until bankruptcy, what will happen? In that case, if we approach the Labor court, what kind of compensation will we get?

Claiming Dues and Compensation

I want to know how we can claim all of the above:

- What are the legal formalities involved in this?
- Where should we start the procedure?
- Where can we read the laws governing company insolvency in India?
- How can employees claim their dues, compensation, and complete all the necessary legal formalities?

If you have apprehensions that the company is going to be liquidated, you can wait until the liquidation process starts. Your claim will be treated as preferential along with other statutory dues. The Liquidators will call for the claimants' statements. Nevertheless, you can make a representation before the labor authorities for non-payment of wages right now. In the representation, you can make it clear that the company is being wound up, and you can seek the intervention of the Department to get the compensation as per the ID Act and gratuity as per the Payment of Gratuity Act paid.

Regards,
Madhu.T.K

My company asked all of us to resign in March 2012 and rejoin in August 2013. They did this because they have not paid the PF contributions for the last two and a half years. They also did not inform us or provide information about how they will settle all of us with full and final settlement. Please advise on the actions that need to be taken. We have informed the PF PRO and others. This is happening as per the top management's instructions.

Regards