We are a group of people working for a multi-billion company in one of its profitable business units. The company decided to let go ff the business unit as it does not align with its business roadmap. The business unit head/management said ok and took over the control.
Now the business unit management has terminated few employees and paid then severance package. For the remaining employees, they are merging the business unit to a small services company whose existence is not known to IT domain. The group of employees are demanding for a severance package similar to the terminated employees as we are asked to voluntarily resign and take the new offer. However the business unit mgmt is pushing the concerns to the company HR area and telling that we are giving you a job, that itself is a great opportunity.
Many of us do not want to join the small company and are demanding for exgratia in case we are forced to take the offer.
I would like to know how this situation can be handled leagally.
From India, Bengaluru
Now the business unit management has terminated few employees and paid then severance package. For the remaining employees, they are merging the business unit to a small services company whose existence is not known to IT domain. The group of employees are demanding for a severance package similar to the terminated employees as we are asked to voluntarily resign and take the new offer. However the business unit mgmt is pushing the concerns to the company HR area and telling that we are giving you a job, that itself is a great opportunity.
Many of us do not want to join the small company and are demanding for exgratia in case we are forced to take the offer.
I would like to know how this situation can be handled leagally.
From India, Bengaluru
Dear Jaya-Janki,
The situation you're describing involves significant legal and HR considerations, particularly in terms of employee rights and severance packages. Here are some key steps and legal avenues that can be explored:
1. Review Employment Contracts and Company Policies
Severance Policies: Review the employment contracts and any company policies regarding severance packages. This includes clauses related to voluntary resignation, termination, and severance pay. If there's a precedent set by the terminated employees receiving severance, this could strengthen your case.
Transfer of Employment: If the transfer to the new company is being framed as a voluntary resignation, check the legal implications of this. Employment law in India generally considers a forced resignation as termination, which may entitle employees to severance.
2. Understand Legal Rights
Industrial Disputes Act, 1947: In India, the Industrial Disputes Act provides protection to employees in cases of retrenchment or layoffs. Employees who are retrenched are entitled to severance pay, usually 15 days' pay for every completed year of service.
Forced Resignation: If employees are being forced to resign and accept a new offer, this could be construed as constructive dismissal. Constructive dismissal occurs when an employee resigns due to the employer's behavior, and in such cases, employees may have a right to claim severance or challenge the resignation.
3. Negotiation with Management
Collective Bargaining: If a group of employees is involved, collective bargaining can be a powerful tool. You could negotiate as a group with the business unit management for a severance package or better terms for those who do not wish to join the new company.
Legal Representation: Consider engaging a lawyer or a labor union to negotiate on your behalf. Legal representation can help ensure that your rights are protected and that the company adheres to legal obligations.
4. Document Everything
Written Communication: Ensure that all communications with the management and HR are documented in writing. This includes emails, letters, and meeting minutes. Documentation is crucial if you need to pursue legal action later.
5. Explore Legal Action
Filing a Case: If negotiations fail, you can explore legal action. Employees can approach the Labor Commissioner or file a case in the labor court under the Industrial Disputes Act.
Legal Consultation: Consulting with a lawyer specializing in labor law can help clarify the legal options available and guide the next steps.
6. Alternative Resolution
Mediation: Sometimes, mediation or arbitration can be a faster and less adversarial way to resolve disputes. This can be considered before escalating to legal action.
7. Consider the New Offer
Evaluate the Offer: While negotiating, also evaluate the offer from the new company. If the terms are acceptable, it might be worth considering, especially if severance is not guaranteed. However, ensure that this decision is well-informed and aligns with your career goals.
8. Stay Informed
Legal Updates: Stay updated on any changes in labor laws or regulations that could impact your situation. Laws can evolve, and new judgments or amendments could work in your favor.
Conclusion:
The situation requires careful handling, both from a legal and HR perspective. It's crucial to stay informed, seek legal advice, and negotiate collectively if possible. Protecting your rights and ensuring fair treatment is the priority.
Thanks,
From India, Bangalore
158The situation you're describing involves significant legal and HR considerations, particularly in terms of employee rights and severance packages. Here are some key steps and legal avenues that can be explored:
1. Review Employment Contracts and Company Policies
Severance Policies: Review the employment contracts and any company policies regarding severance packages. This includes clauses related to voluntary resignation, termination, and severance pay. If there's a precedent set by the terminated employees receiving severance, this could strengthen your case.
Transfer of Employment: If the transfer to the new company is being framed as a voluntary resignation, check the legal implications of this. Employment law in India generally considers a forced resignation as termination, which may entitle employees to severance.
2. Understand Legal Rights
Industrial Disputes Act, 1947: In India, the Industrial Disputes Act provides protection to employees in cases of retrenchment or layoffs. Employees who are retrenched are entitled to severance pay, usually 15 days' pay for every completed year of service.
Forced Resignation: If employees are being forced to resign and accept a new offer, this could be construed as constructive dismissal. Constructive dismissal occurs when an employee resigns due to the employer's behavior, and in such cases, employees may have a right to claim severance or challenge the resignation.
3. Negotiation with Management
Collective Bargaining: If a group of employees is involved, collective bargaining can be a powerful tool. You could negotiate as a group with the business unit management for a severance package or better terms for those who do not wish to join the new company.
Legal Representation: Consider engaging a lawyer or a labor union to negotiate on your behalf. Legal representation can help ensure that your rights are protected and that the company adheres to legal obligations.
4. Document Everything
Written Communication: Ensure that all communications with the management and HR are documented in writing. This includes emails, letters, and meeting minutes. Documentation is crucial if you need to pursue legal action later.
5. Explore Legal Action
Filing a Case: If negotiations fail, you can explore legal action. Employees can approach the Labor Commissioner or file a case in the labor court under the Industrial Disputes Act.
Legal Consultation: Consulting with a lawyer specializing in labor law can help clarify the legal options available and guide the next steps.
6. Alternative Resolution
Mediation: Sometimes, mediation or arbitration can be a faster and less adversarial way to resolve disputes. This can be considered before escalating to legal action.
7. Consider the New Offer
Evaluate the Offer: While negotiating, also evaluate the offer from the new company. If the terms are acceptable, it might be worth considering, especially if severance is not guaranteed. However, ensure that this decision is well-informed and aligns with your career goals.
8. Stay Informed
Legal Updates: Stay updated on any changes in labor laws or regulations that could impact your situation. Laws can evolve, and new judgments or amendments could work in your favor.
Conclusion:
The situation requires careful handling, both from a legal and HR perspective. It's crucial to stay informed, seek legal advice, and negotiate collectively if possible. Protecting your rights and ensuring fair treatment is the priority.
Thanks,
From India, Bangalore
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.
Termination-emp loyment_563.pdf
Termination letter.doc