In a Nagpur Bench ruling dated 23–25 Sep 2025, the Bombay High Court quashed industrial-court orders that had forced retrenched employees to deposit compensation as a precondition to litigate. The Court underscored that compensation under Section 25F, Industrial Disputes Act, 1947 is a statutory right designed to cushion job loss, and making its deposit a gate to justice is inequitable. The matter involved former employees of Agrofab Machineries; the High Court restored their complaints and directed appearance before the labour court in October. Legal trackers and HR media flagged this as a signal on procedural fairness in employer-initiated terminations.
Live Law
Implications for HR/compliance: expect fewer procedural roadblocks at the threshold stage of disputes. Your best defense is documentation—prove genuine redundancy/misconduct, show Section 25F compliance (notice, wages in lieu, compensation), and keep meeting/conciliation minutes. Revisit your “forced resignation” risk: if evidence points to constructive dismissal, expect scrutiny. For multi-site employers, align works council/union touchpoints and settlement templates so local teams don’t improvise under pressure.
Social pulse: employment-law practitioners on LinkedIn are nudging employers to strengthen paper trails and not bank on procedural hurdles; several posts tie this to ongoing IT/ITeS disputes over “forced resignations” in Bengaluru, urging early conciliation.
LinkedIn
Sources:
• Employee need not deposit retrenchment compensation to challenge termination — LiveLaw — Sep 23, 2025.
Live Law
• HC: Can’t force retrenched worker to deposit compensation… — Times of India (Nagpur) — Sep 25, 2025.
The Times of India
• TCS job cuts: union submits records; not mass layoffs — Economic Times — Oct 15, 2025.
The Economic Times
Discussion questions:
What three documents would you want to see in every termination file before sign-off?
How will you distinguish voluntary resignation from a constructive dismissal in your processes?
Where could earlier conciliation have reduced this litigation risk in your context?
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5Live Law
Implications for HR/compliance: expect fewer procedural roadblocks at the threshold stage of disputes. Your best defense is documentation—prove genuine redundancy/misconduct, show Section 25F compliance (notice, wages in lieu, compensation), and keep meeting/conciliation minutes. Revisit your “forced resignation” risk: if evidence points to constructive dismissal, expect scrutiny. For multi-site employers, align works council/union touchpoints and settlement templates so local teams don’t improvise under pressure.
Social pulse: employment-law practitioners on LinkedIn are nudging employers to strengthen paper trails and not bank on procedural hurdles; several posts tie this to ongoing IT/ITeS disputes over “forced resignations” in Bengaluru, urging early conciliation.
Sources:
• Employee need not deposit retrenchment compensation to challenge termination — LiveLaw — Sep 23, 2025.
Live Law
• HC: Can’t force retrenched worker to deposit compensation… — Times of India (Nagpur) — Sep 25, 2025.
The Times of India
• TCS job cuts: union submits records; not mass layoffs — Economic Times — Oct 15, 2025.
The Economic Times
Discussion questions:
What three documents would you want to see in every termination file before sign-off?
How will you distinguish voluntary resignation from a constructive dismissal in your processes?
Where could earlier conciliation have reduced this litigation risk in your context?
Acknowledge(0)Amend(0)
In every termination file, the three documents that are crucial before sign-off are:
1. A detailed termination letter that clearly outlines the reasons for termination. This should include any instances of misconduct or evidence of redundancy.
2. Documentation showing compliance with Section 25F, which includes notice of termination, wages in lieu of notice if applicable, and the calculation and provision of retrenchment compensation.
3. Minutes of any meetings or conciliation sessions held with the employee regarding the termination.
Differentiating between voluntary resignation and constructive dismissal can be challenging. However, it is important to maintain clear records of all communications and actions leading up to the termination. If an employee resigns due to unbearable working conditions or unreasonable demands that essentially force them to quit, it may be considered constructive dismissal. In such cases, the onus is on the employer to prove that the resignation was indeed voluntary and not forced.
Early conciliation can significantly reduce litigation risk. This involves engaging in open dialogue with the employee at the first sign of a dispute or issue. In this context, it could have been beneficial to have open discussions with the employees about their concerns, and potentially negotiate a mutually agreeable solution before resorting to termination. This not only helps to maintain a positive employer-employee relationship, but also minimizes the risk of disputes escalating to litigation.
From India, Gurugram
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1. A detailed termination letter that clearly outlines the reasons for termination. This should include any instances of misconduct or evidence of redundancy.
2. Documentation showing compliance with Section 25F, which includes notice of termination, wages in lieu of notice if applicable, and the calculation and provision of retrenchment compensation.
3. Minutes of any meetings or conciliation sessions held with the employee regarding the termination.
Differentiating between voluntary resignation and constructive dismissal can be challenging. However, it is important to maintain clear records of all communications and actions leading up to the termination. If an employee resigns due to unbearable working conditions or unreasonable demands that essentially force them to quit, it may be considered constructive dismissal. In such cases, the onus is on the employer to prove that the resignation was indeed voluntary and not forced.
Early conciliation can significantly reduce litigation risk. This involves engaging in open dialogue with the employee at the first sign of a dispute or issue. In this context, it could have been beneficial to have open discussions with the employees about their concerns, and potentially negotiate a mutually agreeable solution before resorting to termination. This not only helps to maintain a positive employer-employee relationship, but also minimizes the risk of disputes escalating to litigation.
From India, Gurugram
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Bombay HC - Ruling on Notice Period Not Served - Jan 22.pdf
Compensation and HR practices- questionnaire.d oc