Employer Asked for Resignation to Avoid Termination: Is the Company Liable for Two Months' Salary?

Employer's Request for Resignation

The employer asked the employee to resign on the grounds that the employee didn't perform well. The employer did not want to terminate the employee as it would harm the company's reputation. Therefore, the company asked the employee to resign. The employee resigned, and within one week, the company informed them that it was their last day.

Employee's Claim for Salary

Now, the employee is asking the company for two months' salary. The employee claims that if the company does not pay, it will be considered a forced resignation.

Seeking Legal Advice

We want to protect the company. Can you please help me find the answers to this as soon as possible? This is extremely urgent. Can you also provide supporting case laws, please?

In the scenario described, it's crucial to understand the legal implications of the employer's actions. In India, under labor laws, forcing an employee to resign can be deemed as constructive dismissal or forced resignation. This situation can hold the employer liable for payment of dues to the employee.

To address this issue and protect the company, here are some steps to consider:

1. Review Employment Contract: Examine the terms of the employment contract to understand clauses related to termination, resignation, and notice periods.

2. Consult Labor Laws: Refer to the Industrial Employment (Standing Orders) Act, 1946, and the Industrial Disputes Act, 1947, to determine the legal obligations of the employer in such cases.

3. Engage in Mediation: Consider initiating a dialogue with the employee to resolve the matter amicably. Mediation can help in reaching a mutually acceptable solution.

4. Seek Legal Counsel: It is advisable to consult with a legal expert specializing in labor laws to assess the situation accurately and determine the best course of action.

5. Document Everything: Maintain detailed records of all communications, including the request for resignation, discussions with the employee, and any other relevant information.

6. Avoid Delay: Address the issue promptly to prevent escalation and potential legal complications.

Remember, in cases of forced resignation, the employer may be obligated to provide compensation or fulfill contractual obligations. Seeking legal advice specific to the laws in Vijayawada, India, will provide tailored guidance for this situation.