Case Details: My company has closed / merged my division with another much bigger division. Reason sited by them. 1) Costs being reduced. 2) No performance by our division. The company is giving us an option 1) Either accept a lower profile job in new division with salary cut or 2) Resign. If a person does not agree to either of the above he is being given a termination letter. The company has retrenched minimum 30% of its staff in all divisions. Also the company had sent a mail around 2 months ago that the amount of notice period to be paid under separation / termination clause of the appointment letter is reduced from 3 months to 1 month. My queries: 1) Can a company terminate on these basis. The performance of the company as whole has been low due to recession. The target v/s achmt of our division is much better than the bigger division. But since our division is new...expanded only last year...captial inputs for infrastruture and manpower salaries are high. 2) The company is not giving any written communication regarding reason of closure of division, and options (join at lower level or resign) available to the employee. Only after a person agrees to join at lower level that they get a self declaration signed from employee that due to his performance he is ready to join at a lower level. Under present circumstances it looks like the employees are under-performing and does not give even a slightest hint that the employee is suffering because of closure of division. Is this justified? Can the company be forced to give a written communication? How can this be done? 3) Can a company change the condition of an important clause like notice pay and reduce notice pay to only 1 month. Does it not require a acceptance from the employee also. 4) Does a company have to take approval from some Government body before initiating retrenchment and change in service conditions like notice pay. How can an employee know if the approval has been taken. Thanks and Regards Karma
From India, Ahmadabad
From India, Ahmadabad
Dear Karma, If you are working in the capicity of suprervisor or above then you are to approach civil court for breach of contract otherwise you are put up a demand notice before the Area Labour Cum Conciliation Officer under the Industrial Disputes Act,1947. Change in notice period is a violation of section 9A of I D Act. Regards, R.N.Khola (Labour Law & Legal Consultants)
From India, Delhi
363From India, Delhi
Thank you Mr Khola for your valuable inputs. Just some small query.... Some one today was telling me that if the company informs you of change in clause of notice pay and the employee does not reply in 21 days it is considered implemented! The mail from the company regarding this was sent almost 50 days ago to all employees. Please provide your inputs for this query. Regards Karma
From India, Ahmadabad
From India, Ahmadabad
As far as the reduction of notice period is concerned which you are saying has been informed almost 50 days ago, the provisions of Sec 9 of ID Act has been served which states a 21 days notice for change in service conditions. But it will apply to you only if you fall under the category of workmen under the ID Act 1947. Secondly, the retrenchment by the management is justified or not is a matter which will be decided by the court and not by forum members like us as there are a whole lot of things to consider. Ofcourse there are certain clauses which needs to be fulfilled before issuing a notice of retrenchment. Though it may sound that what happened to you is wrong but that might not be the case once the matter goes to court. The management has lots of issues by which they can prove that the retrenchment was justified. So please consult a good lawyer who can help you in the matter. Regards
From India, New Delhi
From India, New Delhi
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Termination-emp loyment_563.pdf
Termination letter.doc