Dear Members,
Wanted your valuable feedback - Company retrenched its staff members without giving any prior notice. Notice of retrenchment issued 1 week prior to the last working day. Company pays 1 month salary in lieu of 1 month notice period (which is as per appointment letter). Staff retrenched have put in more than 10 years of service and all are management cadre. Reason for retrenchment - global recession for past 2 years, recession to continue for some time, unhealthy competition causing serious revenue loses to company.
Would like to know,
a) Can a company retrench its old staff on this grounds, while keeping the new recruits in the company? Morever so when the new recruits cost more than the old staff and the new recruitments been done in the past 4 years.
b) Can a company retrench its old staff without giving sufficient prior notice period, keeping in mind the long years of service put in by the concerned staff member?
c) Is there any retrenchment compensation applicable in the present scenario?
From India, Pune
Wanted your valuable feedback - Company retrenched its staff members without giving any prior notice. Notice of retrenchment issued 1 week prior to the last working day. Company pays 1 month salary in lieu of 1 month notice period (which is as per appointment letter). Staff retrenched have put in more than 10 years of service and all are management cadre. Reason for retrenchment - global recession for past 2 years, recession to continue for some time, unhealthy competition causing serious revenue loses to company.
Would like to know,
a) Can a company retrench its old staff on this grounds, while keeping the new recruits in the company? Morever so when the new recruits cost more than the old staff and the new recruitments been done in the past 4 years.
b) Can a company retrench its old staff without giving sufficient prior notice period, keeping in mind the long years of service put in by the concerned staff member?
c) Is there any retrenchment compensation applicable in the present scenario?
From India, Pune
Since the staff whose services were terminated by you are in the mangement cadre, you need not pay retrenchment compensation .However keeping in view the priciples of justice and equity, if you want to downsize your managerial staff, you could have followed the principle of "last come -first go" i.e the junior most to go first, as a prudent principle of administration.It would have saved lot of heart burn to those who served the organisation for ten long years.
B.Saikumar
Mumbai
From India, Mumbai
1898B.Saikumar
Mumbai
From India, Mumbai
Community Support and Knowledge-base on business, career and organisational prospects and issues - Register and Log In to CiteHR and post your query, download formats and be part of a fostered community of professionals.
Published_draft _rules_on Employees_ compensation 3.6.2020.pdf
Compensation Benchmarking Survey.doc