Are We Entitled to Retrenchment Benefits from Our NGO? Seeking Guidance on Legal Steps

I have been working for an NGO for over 12 years. It has well-defined staff rules and policies and is registered under the Society Registration Act of 1860. In July 2012, most of the staff were asked to resign as their contracts came to an end. Fresh interviews were conducted, and some staff were retained starting from October 2012. Those retained were given a simple letter instructing them to join the office, with a formal appointment letter promised once funds become available. However, to date, no appointment letters have been issued, and staff have only received advances. Our PF and gratuity remain unsettled, and we have been informed in writing that no benefits or compensation will be provided.

Entitlement to Retrenchment Benefits

Are the staff entitled to retrenchment benefits? What is the timeline for settling the outstanding accounts of retrenched staff? What remedies are available to the staff, and which is the competent court to approach? Kindly guide.

Regards.

There is no exemption from EPF/ESI, etc., for NGOs registered under the Societies Act if you are coverable otherwise. Retrenchment compensation would arise only when you are retrenched on record, whereas you will be treated as resigned. I'm not sure what your labor strength on roll is, what type of operations this NGO does, and how their funds are received and managed. The Registrar of Societies (in the office of the Sub-Registrar in your region) is the authorized officer to inquire into the activities of a registered Society. Your NGO is adopting a clandestine route to evade PF/ESI/Bonus, etc., by relieving some employees and reengaging a few as freshers so that continuity is broken. Do you have a union or are you affiliated with any other unions? You can also lodge complaints with the Labor Officer of your state government, RPFC/ESI in your area to claim these benefits. I would suggest that you consult an advocate well-versed in such matters with all your available documents, and they will guide you on what you can and cannot do.

All the best.

Regards, Kumar S.

From your email, it seems they have run out of money. They have handled things smartly but are mainly banking on:

- You still want a job and will not rock the boat.
- You won't bother with courts.
- Soon money will be available, and some will be rehired with minimum liabilities.

I do not know if you have waited six months or joined elsewhere. If you have not already done so, look for a different organization to work with. You need to approach your local labor office.

Retrenchment Considerations

Terminating/reappointing on a mass scale is going to be considered as retrenchment. No court will believe (especially when workers are filing a case) that everyone suddenly decided to resign or abscond at the same time. So they have to pay retrenchment compensation (the Industrial Dispute Act covers activities where no profits are the motive).

Also, they have to pay gratuity.

Again, PF is not up to them, just get the forms filled and submit them to the PF office. There is enough written on this site on how to get PF from non-cooperative employers.

Understanding Your Employment Rights and Next Steps

From your email, it seems they have run out of money. They have handled things smartly, but are mainly banking on:

- You still wanting a job and not rocking the boat.
- You not bothering with courts.
- Money soon becoming available, with some being rehired with minimum liabilities.

I do not know if you have waited 6 months or joined elsewhere. If you have not already done so, look for a different organization to work with. You need to approach your local labor office. Terminating/reappointing on a mass scale is going to be considered as retrenchment. No court will believe (especially when workers are filing a case) that everyone suddenly decided to resign or abscond at the same time. So they have to pay retrenchment compensation (the Industrial Dispute Act covers activities where no profit is the motive). Also, they have to pay gratuity. Again, PF is not up to them; just get the forms filled and submit them to the PF office. There is enough written on this site on how to get PF from non-cooperative employers.

Thank you very much. I would be grateful if we have a clear direction on the competent courts to approach, as some of us have filed cases in civil courts, which some of us feel will take too long to get a verdict.

Regards.

Thank you very much. I would be grateful if we could have clear direction on the competent courts to approach, as some of us have filed cases in civil courts, which we feel will take too long to get a verdict.

Steps to Address Labor Disputes

First, go and meet the local government labor officer. They will investigate and take up the prosecution where required. They will also guide you on what to do. It's not a civil matter but a labor matter, so it needs to be in a labor court.