Can We Challenge Direct Termination Without Notice in a Loss-Making Company?

Dear all,

My name is Sudher. I work in a private organization where some staff members were removed directly without any notice or compensation for the company's loss. We want to know if we have any right to file a case in the labor court for direct termination without any notice. As far as I am aware, if a company is facing losses and needs to reduce staff, they must provide three months' salary along with a settlement. Can you confirm whether my understanding is correct? Please let me know.

Certainly, you can move to the Labour Court for the redressal of your grievance if you are a 'workman' under the Industrial Disputes Act. The Labour Office in your area will assist you in this matter.

Based on the information provided, if some members have been terminated, it implies that you have been retrenched. Therefore, you are entitled to 'retrenchment compensation' based on the length of service in the organization as per the Industrial Disputes Act.

To proceed with this matter, you may consider engaging a lawyer or a union leader who specializes in such cases.

All the best

Regards

Thank you for the advice. In this case, our HR had played a game. She had taken resignation letters from the staff who were removed, stating it was due to personal reasons, and insisted on paying them three months' salary upon their release. What should be done in this situation?

Before filing a lawsuit in the labor court, it is better if you approach the labor officer of your area. Give a collective representation stating that HR has taken your resignation forcibly. Upon receipt of your application, HR will call both parties to explain their positions. Though the verdict of the labor officer is not binding on either party, it is important to keep him in the loop of all activities. Do not bypass this redressal mechanism that the Government of India has created.

Although the role of the Labor Officer is not to become a mediator, they still tend to favor laborers and try to reach a compromise.

Thanks,
Dinesh Divekar

I fully agree with the advice of Shri Dinesh. Anyone can easily see that the resignation of many workers/employees, all citing personal reasons, is a smoke screen for termination. Approaching the Labor Officer of the area will have a good effect. Try it out while looking around for another job. If a company is in financial trouble, there will be a permanent problem with delayed payments, etc. Seeking alternate employment would be a better solution.

Dear Sudhir,

You can find a remedy for your problems. First, try to settle the matter amicably and out of court. Discuss with HR and the management of your company. If you don't find any solutions, then we will assist you.

Regards,

Govind Sagar MSW, LL.B MPower HR and Labour Law Solutions Bangalore 9036368502