Facing Job Redundancy Without Severance: How Should My Compensation Be Handled?

Hi, my contract was terminated in July due to COVID-impacted job redundancy. The company is not offering any severance package. Instead, they are asking employees to resign. When I refused since this is a case of job redundancy, they terminated my contract citing clause 3 in my contract, which states that either party could give 2 months' notice or 2 months' salary. Consequently, I was given 2 months' gross salary in July on the day of termination, as per the clause. For my F&F, they are providing prorated salary for July, encashment of earned leaves until July, and prorated LTA from April to July minus tax deduction.

Questions Regarding Compensation

Q1 - Shouldn't they be paying LTA in full for the year or also for the 2 months?

Q2 - As per my CTC, 20% is variable pay, paid annually. They are refusing to pay my variable pay. Should it be paid for the full year, until prorated July, or also for the 2 months? When I joined in October 2017, they had paid a prorated amount of my annual variable pay for 5 months and 2 days for the year 2017-2018.

Q3 - There is also a fixed bonus in my CTC paid at the end of the year, which is not being paid.

Q4 - What should I do?

In the situation described, it's crucial to understand your entitlements and rights as an employee, especially in the context of job redundancy due to COVID-19. Here are some steps you can consider:

1. Review Your Employment Contract: Carefully examine your employment contract to understand the clauses related to termination, notice period, severance, variable pay, LTA, and bonuses.

2. Consult with HR or Legal Advisor: Seek clarification from HR or a legal advisor regarding the company's decision not to pay certain components of your full and final settlement (F&F).

3. Refer to Applicable Laws: In India, labor laws such as the Industrial Disputes Act, 1947, and the Payment of Gratuity Act, 1972, govern aspects of severance, gratuity, and other employment-related benefits. Ensure that the company's actions comply with these regulations.

4. Negotiate Amicably: Initiate a discussion with the HR department or management to negotiate the payment of your full entitlements, including LTA, variable pay, and the fixed bonus as per your CTC.

5. Document Everything: Keep records of all communications, agreements, and documents related to your employment, termination, and F&F settlement discussions.

6. Consider Legal Recourse: If necessary, explore the option of seeking legal advice or filing a complaint with the labor authorities if you believe your rights have been violated.

7. Stay Professional: Throughout the process, maintain a professional demeanor and approach to resolve the matter amicably while safeguarding your rights as an employee.