Facing Layoffs Due to Project Shortage: What Are Your Options and Rights?

Hi all, I have been working with a private software company in Bangalore for the last 5 years. My present designation is Project Leader. For the last five appraisals, my ratings have always been good, and I have successfully completed numerous projects in the last five years.

Current Issues in the Company

But presently, there are a few visible issues:

1. The company is not able to secure enough projects and is deciding to lay off/terminate employees. Verbally, it is being communicated that the employer is not able to secure enough projects.
2. The layoff/termination is happening in such a way that HR is asking the employee to resign.
3. HR is saying two months of salary will be paid. I'm not sure if it's the full salary or only the basic. There is no concept of DA in this company.

Options for Employees Facing Layoffs

In such cases, can the employee:

1. Reject the offer
2. Take legal action
3. Accept the offer with higher compensation, e.g., 1-year salary, along with other dues below:
- PF/Gratuity
- Earn leave amount

Regards

When the inevitable is about to happen, read the signs and move out. Rejecting the offer of voluntary resignation will only result in termination or joblessness when the company folds up. Legal action will not help in the short run in any way. Companies do collapse. If you get a better offer, leave the present employment gracefully.

I do not think there is much scope for any legal action available for you if they terminate you. The management can prove that you were holding a supervisory position and hence you are not eligible for any rights under the ID Act. You may also examine the provisions of the Karnataka Shops and Commercial Establishment Act for legal possibilities. Whether you resign or are terminated, you will receive gratuity. You are also eligible for a bonus and earned leave amount depending upon the company's policy. You can transfer or withdraw PF.

In reply to the choices you mentioned - 1, 2, 3, a & b - I would say NONE OF THEM. The ONLY choice you have is TO ACCEPT REALITY and move on in life and career. In a way, you have some sort of an advance notice about what's about to happen, so make the best use of it. Begin to look for new jobs ASAP. Also, suggest learning from this situation that there are ALWAYS downsides to any choice one makes.

Most often, people of your age get enamored by the IT sector that they fail to see the downside, which is what you are facing now. Things were far worse in the 2001 and later 2008 recessions; thousands of IT professionals got laid off, getting a shock of their lives. Till then, getting laid off was unheard of in the Indian context; one only heard that it happens in the USA.

I suggest DON'T wait until you get terminated/fired. Buy time to the extent you can and then resign after getting another job. In the meantime, if your turn comes to be contacted by HR, prefer resigning to being terminated. Like Nathrao mentioned, termination will bring more new problems than solving this one.

Nowadays, companies prefer those who can join ASAP, which is what you would be able to do. So you DO have an advantage, in a way, over others in your job hunt. You can always be candid about the reason for resigning; company going for layoffs due to lack of projects is now an accepted fact of life in the IT sector.

All the best.

Regards, TS

All the responses are not valid. You can fight back... Don't resign. I was in a similar situation, and they have finally allowed me to join the project.