How Should I Handle Being Let Go Without Severance Pay or Bonus During COVID-19?

I received a cessation letter as below from Home Credit.

COVID-19 is impacting everyone around the world and every aspect of our daily lives: our social interactions, our family life, our communities, and, of course, how all of us work at Home Credit. Multiple aspects of our business have changed dramatically over the last couple of months, and many of these changes are expected to be permanent. While we will continue to build a more focused Home Credit, we do not foresee having enough productive work for all our employees. We owe all our colleagues a challenging work environment, but we won’t be able to offer that to you going forward.

While new business models & formats, digital leadership, and innovative data tools help, the decision of how to operate and when to make changes is a human one. With limited business opportunity, we are compelled to adjust our market strategy and organization structure to sustain and survive in this difficult competitive market.

In view of the above, we regret to inform you that your services would no longer be required by the Company with effect from the closing hours of 28-May-2020.

In lieu of such cessation, you will receive Notice Pay as per the Notice Period Policy in accordance with the Terms & Conditions of Employment with Home Credit India Finance Private Limited.

The management wishes to place on record its appreciation for all your contributions in the past and wishes you all the best for the future.

After this letter, I asked for severance pay and a prorated bonus, but the company is not responding. They are blocking my email every time I send them an email asking for the same. They did F&F with notice pay and leave encashment.

Please advise. I was working as a Sr. Manager there.

Thanks

Harvinder

Severance Pay and Bonus Entitlement

This is not an isolated case. Even the Apex Court has stated that such matters should be settled between the employer and the employee and should not escalate to higher authorities. Whatever you have received should be treated as the final payment due to you.

Retrenchment Compensation and Severance Pay

Was there anywhere in your appointment order that mentioned you would receive retrenchment compensation or severance pay? Normally, this is not the case. However, for an employee under the purview of the Industrial Disputes Act, compensation for loss of job, depending on the number of years worked, should be paid, even if the appointment order is silent about it. However, for a Manager, there is no provision for severance pay.

Bonus Entitlement

Bonus is also payable to those who come under the bonus qualifying salary bracket (Rs. 21,000), and obviously, your salary would be much higher than this. Certainly, companies pay bonuses as part of the CTC to employees in the managerial cadre as well. However, this cannot be demanded as a dispute falling under non-payment of bonus. For the recovery of a bonus or part of a bonus, you should file a civil suit, claiming a breach of contract. Clearly, there is a breach of contract because, as per the contract, there is a remuneration called a bonus that has not been paid by the employer. However, the non-payment of the bonus will not be entertained by the (Labour) dispute settlement machinery but can only be challenged as a breach of contract in a civil court.

Questioning the Legality of Mass Layoffs

I read this note, please correct me if this is wrong:

I asked questions to the company as they terminated 1800 employees in a single day:

1. Did they take approval from the respective authorities for this layoff?
2. Do they have a standing order for the layoff?
3. Under which act are they withholding bonus and severance pay?

I never received a reply even after writing six emails. I logged the complaint with the labor office. They sent a notice to the company, but no one came. Now, the labor inspector has asked me to file a case in the labor court.

Legal Provisions Under the Industrial Disputes Act

I read online:

Subject to the provisions of Chapter V-B of the Industrial Disputes Act, 1947, in respect of lay-off, retrenchment, and closure, the company has to get prior permission from the appropriate government before resorting to such maneuvers affecting the employment of its employees falling within the definition of the term "workman" under the Act. If not, the orders of retrenchment will be illegal.

Secondly, irrespective of the amount of salary, all employees working under the supervision and control of their superiors are considered workmen as defined under the ID Act, 1947. One of my friends sent the case - A S Raghavendra vs M/S Bharati Airtel Limited on 29 November 2019. Being the expert, please check the judgment and advise.

Thanks, Harvinder

True, retrenchment of workmen without approval from the government is illegal. Also, those who do not have managerial functions fall under workmen, even if they are designated as Managers or Senior Managers. The cited case and other cases relevant to the issue support it. Since your Labour Officer has expressed his helplessness, the only way out is to approach the court. The Labour officer himself should have referred it to the Labour Court or tribunals. Since it is a matter of 1800 employees, some positive steps can be expected.

Bonus here is performance bonus. I got over 100% in last 3 years, even 107% for last year. Since company terminated us so they are liable to pay prorated amount from 1st jan to 28th may, whiçh anyways we would have got in case of continuation of service till 31st dec 20.
Can you provide some judgements where it has been mentioned that all managers come under workman.
Also should i file claim notice or demand notice?
Pls advise