Forced Resignation During COVID-19: Can We Seek Compensation and Understand Benefit Differences?

Seeking Advice on Forced Resignation During COVID-19

Please suggest: We have been forced by the company to resign as our process has been rolled back. During this COVID-19 time, when there is a high rate of unemployment, can we ask the company to give us compensation since nothing is in writing, only verbally informing us to resign? This way, only two months' notice pay as per the appointment letter will be given. Please help us in finding remedies in terms of monetary benefits.

Termination Benefits vs. Resignation Benefits

What is the difference between termination benefits and resignation benefits?

Dear Madhu,

Understanding Resignation and Constructive Dismissal

The term "resignation" implies voluntariness, and in the realm of employment, it is the voluntary act of unilateral termination of the contract of employment by the employee, subject to the notice conditions, if any, stipulated already. In law and philosophy, voluntariness is a choice made of a person's free will as opposed to being made as the result of coercion and duress. Therefore, if an employee is coerced to resign by the employer, it amounts to constructive dismissal, which can be agitated against by the affected employee in the appropriate forum.

Notice Period and Compensation

As it is, in the case of resignation, the resignee is not entitled to any notice salary. On the contrary, only he is required to serve the notice period or pay some amount to the employer in lieu of such notice as stipulated in the employment contract. In this backdrop, the 2 months' notice salary offered orally by the employer may be the compensation to persuade the selected employees to resign forthwith. If the employer fails to keep up his words later, the resignees have no locus standi to claim it.

Alternative Options for Employees

If the desired exit is based on genuine reasons and the employees actually don't like to precipitate the issue, alternatively, they can ask for retrenchment and payment of retrenchment compensation under section 25-F of the IDA, 1947, if they happen to be "workman" under section 2(s) of the Act, or notice pay for unilateral foreclosure of the contract of employment by the employer in any other case of employee status.

Entitlements Upon Resignation

Resignation, per se, does not entitle the resignee to any compensation or terminal benefit other than encashment of earned leave at credit, statutory gratuity if eligible, and other payments like incentives/bonus pertaining to the past service.

Thank you so much, sir, for the clarity. May I kindly request your suggestion on whether we can take a stand to not resign at this time when the job market is unstable? Management is saying that they will take legal action against us, and we will not receive anything.