Navigating COVID-19: Can ITES Companies Legally Lay Off Employees and Adjust Leave Policies?

Dear friends, hope all are doing well.

Currently, many companies are preparing countermeasures to protect against the downturn in their business impacted by COVID-19 and subsequent lockdowns implemented by the government.

Understanding Positions from an Epidemic Law Perspective

In order to do the same, I need your help in understanding the following positions from an Epidemic Law or any other labor law perspective:

1. For an ITES company, is it liable to pay salaries on time?

2. Can an ITES company lay off any employees impacted by the COVID-19 situation?

Leave Policy Adjustments

3. According to the leave policy, every employee is allowed to accumulate leaves up to X number of days, where all unused accumulated leaves are encashable upon termination. Can we change the leave policy to make it non-cumulative, whereby all unused leaves would lapse by the end of the year for all employees?

Many thanks for your time and help.

Dear Priya, hope you and your family are doing well.

1. Salary Obligations for ITES Companies

For an ITES company, is it liable to pay salaries on time? Yes, it is mandatory.

2. Lay-offs Due to COVID-19

For an ITES company, can they lay off any employees impacted owing to the COVID-19 situation? No, you cannot go for lay-offs. The government has already asked employers not to resort to lay-offs.

3. Leave Policy During Lockdown

As per the leave policy, every employee is allowed to accumulate leaves up to X number of days, wherein all unused accumulated leaves are encashable upon termination. It is too early; just wait until the end of the lockdown period, i.e., April. You cannot force leave during the lockdown period. The scenario will be clearer at the end of this period. If it continues further, lay-offs may become an inevitable measure for all kinds of industries.