Is It Fair for My Sister's Company to Require Work After a Termination Notice? Seeking Advice on Termination Policies

I would require your guidance on the following: My sister is working with a company. Last week, her company gave her a termination letter with one month's notice due to the company closing its business. This letter has been given to all the employees of the company. According to the letter, the company's notice period ends on the 15th of April. Her company expects all the employees to work until the last date (15th Apr 13). The company has paid the salary to all employees until 31st March 13.

The company will pay the salary for the next 15 days on the last day of work as per the termination letter.

Queries Regarding Termination Notice

I have the following queries:

1) Does the employee need to work for the company after receiving a termination letter with one month's notice?

2) Also, I feel the company is not paying additional salary as per the termination policy; they are paying the salary for worked/working days.

Please give me your expert advice. I truly believe the company is cheating all the employees.

Dear all,

Would require your guidance on the following:

My sister is working with a company. Last week, her company gave her a termination letter with one month's notice due to the company closing its business. This letter has been given to all the employees of the company.

As per the letter, the company's given notice period ends on the 15th of April. Her company expects all the employees to work until the last date (15th Apr 13).

The company has paid the salary to all the employees till 31st March-13 and will pay the salary for the next 15 days on the last day of work as per the termination letter.

Designation and Industry Context

What is the designation of your sister? What industry is she working in? There is a difference between retrenchment and a company closing its operations. Retrenchment is related to downsizing when the company needs less manpower due to operating at a lower rate.

They have given a one month's notice. The obligations for retrenchment are covered under labor laws and are mainly for blue-collar employees. I doubt if the same are applicable for white-collar workers. It depends on the industry and designation of the employee.

Queries Regarding Termination

1) Does the employee need to work for a company after receiving a termination letter with one month's notice?

Yes, the employee is expected to work till the last day mentioned in the termination letter, similar to a notice period in a resignation letter. If your sister wishes for an early exit, she should discuss it with the HR department for negotiation.

2) Also, I feel the company is not paying additional salary as per the termination policy; they are paying for the days worked/working days. What is the termination policy at their company? Are you aware of it?

Please give me your expert advice. I truly believe the company is cheating all the employees. Can you provide more details to support your claim?

Regards,

Thank you for your response! She is in the e-commerce industry, managing operations.

(a) Four weeks' prior written notice from the company.
(b) Twelve weeks' written notice from you until you have been continuously employed for twelve complete years; and
(c) One additional week's notice for each completed year of continuous employment thereafter, up to a maximum of 16 weeks' notice.

Thank you for your response! She is in the e-commerce industry, managing operations. I found a relevant article -

How to Shut Down a Private Limited Company in India?

Here are the procedures for shutting down a private limited company in India:

1. Up-to-date returns (viz., Annual Return and Balance Sheet) have to be filed with the Registrar of Companies (ROC).

2. A statement of account has to be prepared one month prior to the submission of the application u/s 560 stating that there are no assets and liabilities except share capital and P&L debit balance.

3. An Affidavit needs to be executed (Rs. 20 Stamp Paper) and notarized (signed by all directors).

4. An Indemnity has to be executed (Rs. 100 stamp paper) (signed by all directors).

5. If there is any unsecured loan, then a waiver letter should be submitted.

Timeframe: About 2 months

Source: http://cogzidel.in/blog/2010/09/17/h...pany-in-india/

Apart from this, can you elaborate on why you think the company is cheating?

What is the tenure of:

a) Your sister's service

b) The company's service or life.

Have they mentioned any reason for closing their operations either on the termination letter or have they communicated verbally to them?

You mentioned that they were handed a termination letter mentioning 15th April as the last working day. What is the harm in going for the last few days to the office?

You can always search for a job eventually, and if you get something suitable, one can go for the interview. I do not think that HR would make a fuss over it, knowing that they are completely closing down, and it is obvious that the employees will have to look out for new jobs.

Dear friends,

Even for closing down an establishment/firm, the termination of employees has to take place, and they have to be paid "Retrenchment compensation" along with other benefits such as gratuity, PF/Pension, bonus, and leave encashment. A full and final settlement should be made based on their eligibility. There is no other alternative to closing employment other than retrenchment with suitable compensation.

Regards,
Kumar S.