Compensation Payable Upon Termination Of Services - Managerial Staff In ITES / Service Organisation

Dear all,
We are an IT Services company in Karntaka.
We would like to terminate the services of a manager (non-workmen) due to change in business plan / organisation restructure. Her services would no longer be required due to reorganisation.
Please can you advise on the procedure to be followed and the compensation payable to this person upon termination?
Many thanks and appreciate your quick response.
Vijaya

Dear All, please can I have your advice ASAP?
Regards
Vijaya

Dear Vijaya,
How have the separation been mentioned in the Appointment Letter? Three months salary or the notice period pay as declared in the appointment letter, is what you would need to pay.
You need to communicate this to her in written and in person. Discuss a transition plan with her, on what should be her last date of working and the exit process. Please plan for the communication , well-in hand, as it would be rough for her.
PF and other retirals would be applicable as per her eligibility .
Offer her assistance with placement, if you have any within your firm or vendor firms.
Hope that helps!

Many thanks (Cite Contribution) for your time and advice. This is very helpful.

Her notice period is 3 months and we would like the termination to be immediate i.e. she need not come to office from the next day as there are a couple of behavioural issues with this person that could affect the morale and motivation of others.

Please see below the clause in her appointment letter :

THE TERM

8.1 Your employment with the Company commenced on or before xx September 2006.

8.2 Unless previously terminated under the other provisions of this clause 8, your employment will continue until the expiry of written notice for not less than the appropriate period given by either you or by the Company to the other. The appropriate period of notice to be given by you or the Company will be detailed in your offer letter or otherwise notified to you in writing from time to time.

As per the terms and conditions of her service agreement / appointment letter we need to provide 3 months notice or pay in lieu.

Therefore please advise if the following full and final settlement computation is okay :

1. salary for the no. of days worked in the month

2. notice pay for 3 months covering the contract clause

3. pay for unused leave (basic salary)

4. gratuity as per the gratuity rules

We would like offer the option of voluntary resignation in the first place and in case she doesn't want to resign on her own, we will issue the termination letter informing her that we would like to discontinue her service as her position is no longer required owing to the change in business requirements / organisation restructuring.

I hope we are going in the right direction and this person wouldn't challenge the above compensation that is being worked out.

Your views and suggestions would be appreciated.

Many thanks once again.

Regards

Vijaya

Managerial staff is not entitled for any compensation under ID Act.All depends on terms of appointment.Check the provisions of Shop and Commercial Estt: Act of your state also
Varghese Mathew.

Dear Vijaya
Unused leave are to be paid as you have granted leave to her i.e. when she remains on leave and no allowance is deducted.
For best I under-stand, no allowance (HRA etc.) should be deducted and total salary should be divided by 26 so as to arrive at average pay(in the case of PL/EL). This will not lead to any short payment, at later stage, if termination is challenged. I am suggesting you so a sometimes court send back the employee on this short count and thereafter any payment does not make the order good.
Thanks
V K Gupta

Dear Vijaya
You have made it amply clear that; "we would like the termination to be immediate i.e. she need not come to office from the next day"
I have one query to what you have written :
"We would like offer the option of voluntary resignation in the first place and in case she doesn't want to resign on her own, we will issue the termination letter informing her that we would like to discontinue her service as her position is no longer required owing to the change in business requirements / organisation restructuring. "
In case she goes for voluntary resignation; she will be doing it on your own request/advice; and it will save the company any further complications/claims in case of any dispute in future. Right ?
So in such a case, where she puts in her resignation;
would she still be entitled to, and get her 3 month's notice pay; and you shall pay it ?
Warm regards.

That's right. Notice period is 3 months in her appointment letter and we will have to honour that.
Regards
Vijaya

Deaar Vijaya
Thanks for your response.
I know many companies who con their regular employees to give resignation; later deny giving the notice pay despite an understanding arrived it.
It is good that your company intends to honour their commitment/understanding with thee employee.
Warm regards.

Dear Vijaya
Our members have already guided you in this subject.
I would like to summarise the above.
1. 3 months notice pay and the pending salary for the period worked.
2. As the terminated person is eligible for Gratuity, calculate and pay the Gratuity amount.
3. Pay the Leave encashment whatever the leave available in his/her credit.