Facing Unexpected Layoffs After Agreeing to Salary Cuts: What Can We Do Now?

Hi, I am working in the Hospitality Industry. Due to the pandemic situation, the company is facing some financial crises.

Salary Deductions and Consent

The company has decided to deduct salaries every month until the company returns to normal conditions. They have asked for signed consent letters mentioning the voluntary deduction of salary to help the company. All the employees have signed it as we all want the company to survive so that our jobs will be saved.

Unexpected Terminations

However, just after one month, the company terminated 50% of the employees without providing a clear reason for the terminations. During the full and final settlement, they are still deducting salaries.

Seeking Advice

Please advise on what can be done in this scenario. The consent letter submitted via email can be withdrawn as employees were volunteering for the deductions.

Your advice would be greatly appreciated and helpful for many employees.

Thank you.

Dear Hemlata, the narrative of your post compels me to think that all the employees have simply walked into the trap of the management by submitting individual undertakings to work at reduced wages/salary as dictated by the management. The format of the consent letter proves it. If it is genuinely voluntary in order to save the organization and the employment of all the employees, it can be tolerated to some extent as it is only a stop-gap arrangement. But the next move of the management sending 50% of the employees out of employment suddenly during the following month, that too with settlement of their terminal benefits at the reduced rate of salary, is totally illegal and unethical.

In this situation, you have to act collectively against the management and consider the following immediate actions to be taken:

1) All the terminated employees issue one month's notice to the management informing them of their intention to make a complaint under the Disaster Management Act, 2005 to the State Authority for violation of the lockdown instructions issued by the Central Govt.

2) Those terminated employees belonging to the cadre of workmen have to raise individual disputes u/s 2-A(1) of the ID Act, 1947 against their illegal termination before the Conciliation Officer for the area.

3) Those who are still in service have to write back to the management withdrawing their consent letters for reduced wages, as it was obtained under coercion, and they should be paid salary at the previous rates.

It would be better to make a joint complaint to your State Labor Commissioner first.

Dear Hemlata,

On the first instance, all the employees terminated should send an application to the High Court of the state's jurisdiction and to the Supreme Court as well. Have employees received any communication from HR requesting the submission of a consent letter?

Settling on a reduced rate of Basic pay is a violation, and the consent letter would not provide any benefit to the employer. Please advise the co-employees not to accept the Full and Final (F&F) settlement for now and to report this matter to the State Labor Commissioner.

Thank you.

Dear Umakanthan.M,
Sir, whiling agreeing with you, I would suggest to write (through email: [Login to view]) to the Nodal officer at the level of the Ministry to deal with “Employee Grievances with respect to COVID-19, Govt. of India" and also to other authorities so that the justice would be faster.
Regards,
Akhil Bhartiya