Facing Job Loss Due to Pandemic: Can We Legally Seek Retrenchment Compensation?

Hi, I am working in a BPO company as a workman since July 2019. Recently, we received a communication from our manager that the business is about to ramp down from this location due to the ongoing pandemic. Hence, we are given two options: either to serve a notice period of a month until June or until July with half working hours and half salary. I personally feel that this is not the correct way of approach. Kindly suggest if we can avoid this since getting new jobs in the current situation is unlikely.

They said, "since the company is asking to resign a month earlier, there are no retrenchment compensations applicable." Please also let us know if we can ask for retrenchment compensation through a legal approach.

Employer's Rightsizing Decision During Lockdown

The present inability of the employer to provide employment to all on the roll may be true, and his decision to rightsize the number of employees cannot be found fault with in the lockdown situation and the economic consequences to follow. However, he should not compel or coerce the employees to resign without any compensation—that too after serving the notice period at half the wages.

Legal Implications of Retrenchment Without Compensation

If any employee who has completed 240 days of continuous service in the establishment is retrenched without retrenchment compensation and notice as provided for under section 25-F of the IDA, 1947, that is illegal. It is better to bring it to the notice of the management and insist on retrenchment compensation. Do not yield to their pressure and tender resignation, in which case you will have to serve the notice period or pay the proportionate amount, and you will not receive any compensation.