How Would Removing Benefits from CTC Affect Employees and Ex-Employees?

Impact of Removing Benefits from CTC

I have been working with a logistics company for the past 2 years. We currently offer Leave Encashment, LTA, Medical, and Bonus benefits as part of the salary package. However, our management is now considering removing these benefits from the CTC. If this change goes through, it will lead to a reduction in our overall package. Additionally, even employees who have left the organization would still be entitled to receive all these benefits.

Your suggestions on this matter would be greatly appreciated.

Regards,
Shikha Mahajan
HR

Management's Right to Reduce CTC

If the management wants to reduce its CTC, there is nothing wrong with it legally. You need to issue letters to each employee informing them of the revised CTC. Each employee has the right to accept or reject the change. If he or she does not accept the revised CTC, he or she must resign and find another job.

You are not under the Industrial Dispute Act, so this cannot be an industrial dispute. If the union is there, then of course, the concurrence of the union will be required to avoid disruption. I assume the management is increasing the basic salary to compensate for the reduction in benefits. If not, then be prepared for good employees leaving for other companies. No one likes a loss of pay.

A better way probably would be to apply the rules to new employees and to change the pay structure for existing employees during the time of annual increment or performance review.