Employer Asking For Resignation Or Else Will Get Terminated

I am working in a private firm that is going through restructuring and facing a financial crisis. As a result, my new boss asked me to report to the HR department where they were going to assign me new tasks. To my surprise, they started to explain the bad condition the company is going through and asked me to look for options verbally. After a few weeks, senior HR members asked me to resign and warned that they could terminate me if I did not comply.

Since then, there has been no communication from them. In my 3.5 years with the company, I have not received any notice of misconduct. Instead, I was promoted last December. There is no mention of a notice period in my appointment letter. The termination clause states that if I am found engaging in any fraud or misconduct, they can terminate me immediately.

I would appreciate any suggestions on what I should do.

Regards,
Neeraj Poddar

Hi Mr. Neeraj,

Organizations are allowed to retrench their employees due to a financial crisis under the law; however, they should give a 30-day notice period in case your organization employs less than 100 workers by mentioning the reason for retrenchment. Alternatively, they can pay 30 days' pay in lieu of the notice period with compensation of 15 days' salary for each completed year.

If your organization employs more than 100 workers, it should seek permission from the government to proceed with retrenchment. In this case, they should also give a 3-month notice period by stating the reason for retrenchment. Alternatively, they can pay 30 days' pay in lieu of the notice period with compensation of 15 days' salary for each completed year.

In both cases, your employer has to follow the principle of "last come, first go," which means that those who joined last should be retrenched first. However, there is an exemption for workers who possess high skills.

Whether it is mentioned in the offer letter or not, your employer has to adhere to the above-mentioned provisions and principles.

With Regards,

Mr. Thumbs Up

Dear Neeraj,

Mr. Praveen has explained the procedure that the company needs to follow, but whether the company will stick to the same is a question. You always have the option of moving to the labor court, but the matter will take a long time to be heard and settled. Until then, even if you join the new organization, will they give you leave to attend the proceedings?

So, though you have all the law on your side, do you have to follow the righteous path until the logical end is the bigger question. In reality, look out for greener pastures and move ahead...

Regards,
Ashutosh Thakre

Dear All,

Thank you all for providing in-depth information on my issue. As I have mentioned earlier, they have not made any further communication yet. Should I go and directly ask for 30 days' pay in lieu of the notice period with compensation of 15 days' salary for each completed year and resign, or should I wait? Will they provide me with any written confirmation regarding the 30 days' pay and compensation?

Best Regards,
Neeraj Poddar

If I were in your position, I would look around for jobs. I will not resign immediately and wait for developments on the termination front. In the case of termination without following due procedure, give them a legal notice of moving to the Labor court but necessarily need not really go to court. The fact of moving court may make the company pay you compensation (though they are in money trouble). But then you know the ins and outs of your company and should decide carefully about your actions.

Dear Neeraj,

If the company is really in financial trouble, an honorable exit by maintaining goodwill and mutual trust is much more valuable than 30 days' pay and/or compensation. With a friendly exit, even the company bosses may prove to be helpful in finding a good job or in developing your career through another company.

Dear Sirs,

I am not convinced by their excuse of a financial crisis as they are hiring new people for the same work. It's more like politics for the higher management.

Regards,
Neeraj Poddar

If they are targeting you, there is no point in remaining in such a company. You will feel that they are causing you harassment. It is better to look for some other job.

A S Bhat

Hello Neeraj Poddar,

Regarding your statement, "I am not convinced with their excuse of financial crisis as they are hiring new people for the same work," please note that this may not necessarily indicate an absence of financial trouble. Many companies hire new employees to reduce the wage bill. Unfortunately, in today's scenario, companies cannot simply shut down. Their perspective may involve letting go of higher-paid employees and replacing them with lower-cost alternatives for the same roles.

Regardless of how you view the situation, your best option is to seek new employment promptly. Begin your job search and ensure to keep the HR department informed of your endeavors. Failing to do so may lead them to assume neglect of their requests, potentially resulting in premature termination.

As Nathrao pointed out, pursuing legal action is always a possibility in such circumstances, including yours. However, it may not always be the most suitable or optimal choice.

Best of luck.

Regards,
TS

If you are not convinced, you can feel free to fight for your cause. However, your assumption about the non-existence of financial trouble in the company should not be the sole basis for your conviction, especially just because the company is hiring new people. It would be better to form your opinion only after reviewing their Profit & Loss Statement and the Assets & Liabilities depicted in the balance sheet of their annual account.

Fresh recruitments are not necessarily made only for replacing existing staff; they can also be for damage control or crisis management within the company, depending upon the qualifications, expertise, and competence of the new candidates.

Dear all,

As of now, I haven't heard anything from the management regarding compensation. I have decided to leave the organization if they agree to pay the compensation. Therefore, I have sent an email stating:

"In reference to the various discussions held with the management, I would like to request payment of two months' salary in lieu of my notice period. I have my family to look after, and I will be exploring other employment opportunities after resigning from the company. Thank you for considering my request."

I have not received any response to this email. Could you kindly suggest what my next steps should be?

I agree with Tajsateesh, you should look for other options rather than waiting or getting yourself engaged in legal matters.