Facing an Unwilling Job Transfer: Are We Entitled to Severance or Compensation?

My company is outsourcing about 300 of our employees across the globe to an Indian IT services company. We are being asked to resign from the current company and accept the offer letter of another company. We could either accept the new offer or decide to leave the company. The time given to decide is less than 30 days.

I have completed 2.5 years in this company, and there is no severance pay or any sort of compensation for ending the employment. Could you advise whether the company is obliged to provide severance/compensation in this matter, irrespective of the offer we are receiving?

**Location**: Chennai, India

severance payout, gratuity act, severance pay, gratuity transfer, offer letter, Country-India, City-India-Chennai

In the situation described, if your employment is being terminated due to an unwilling transfer as part of the outsourcing process, it's essential to understand the legal aspects concerning severance pay and gratuity in India. Here is a practical response to your query:

Legal Perspective on Severance Pay and Gratuity Transfer in India

1. Severance Pay: According to Indian labor laws, companies are not legally required to provide severance pay unless it is explicitly mentioned in the employment contract or company policy. As there is no severance pay or compensation clause mentioned for ending your employment, the company may not be obligated to offer severance in this scenario.

2. Gratuity Transfer: The Payment of Gratuity Act, 1972, governs gratuity payments in India. Generally, gratuity is payable to employees who have completed at least five years of continuous service. In cases where the employment is terminated before completing five years, gratuity may not be applicable unless specified differently in the employment agreement or company policies.

Practical Steps to Consider

- Review your employment contract, company policies, and any relevant documentation to understand if there are specific clauses related to severance or gratuity in case of involuntary termination.
- Seek clarification from your HR or legal department regarding the company's stance on severance pay and gratuity transfer in the context of the outsourcing arrangement.
- Consider consulting with a legal advisor specializing in labor laws to understand your rights and options concerning compensation upon the termination of employment.

By proactively seeking information and clarifying your rights, you can make informed decisions regarding the offered transfer and potential compensation in line with Indian labor regulations.

Remember, it's advisable to seek personalized legal advice to address your specific circumstances effectively.

Reference
https://www.india.gov.in/topics/empl...uity-employees