Hello,
My current company has given a prior notice about the layoff on 2nd December 2016 due to a shortage of projects.
1. The HR team has informed us that the Full and Final settlement (FnF) will be on 31st December 2016. Until then, there is no need to come to the office. We can search for a new job in the meantime, and December's salary will be paid after 10th January, upon completion of the FnF process.
2. The issue revolves around the severance payout. As far as I know, if there is a 2-month notice period (as mentioned in the offer letter), they should have either notified us two months earlier or paid the severance for two months (covering December and January).
Despite a few of us approaching the management and HR team regarding this matter, they have not been receptive and have provided negative responses.
I seek your assistance in understanding whether our approach to the management/HR team was incorrect. If so, what would be the next course of action I should take to persuade them to agree to our request?
I look forward to hearing from you. Your support is greatly appreciated!
From India, Bengaluru
My current company has given a prior notice about the layoff on 2nd December 2016 due to a shortage of projects.
1. The HR team has informed us that the Full and Final settlement (FnF) will be on 31st December 2016. Until then, there is no need to come to the office. We can search for a new job in the meantime, and December's salary will be paid after 10th January, upon completion of the FnF process.
2. The issue revolves around the severance payout. As far as I know, if there is a 2-month notice period (as mentioned in the offer letter), they should have either notified us two months earlier or paid the severance for two months (covering December and January).
Despite a few of us approaching the management and HR team regarding this matter, they have not been receptive and have provided negative responses.
I seek your assistance in understanding whether our approach to the management/HR team was incorrect. If so, what would be the next course of action I should take to persuade them to agree to our request?
I look forward to hearing from you. Your support is greatly appreciated!
From India, Bengaluru
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Dear Parvez,
Certain important particulars are missing.
1) What is the nature of your company - manufacturing unit, service industry coming under the Shops and Establishment Act, etc.?
2) What is the total number of employees falling within the definition of "workman" under the ID Act, 1947, on average during the last 12 months from the date of issue of the notice?
3) Whether all the employees, including yourself, served with a notice of retrenchment (that's what actually the legal meaning of what you've mentioned as lay-off), are workmen or officers of predominantly supervisory capacity above the monthly salary of Rs. 1600/- or of managerial capacity?
These are the vital pieces of information based on which only appropriate answers can be suggested for further action.
From India, Salem
6108Certain important particulars are missing.
1) What is the nature of your company - manufacturing unit, service industry coming under the Shops and Establishment Act, etc.?
2) What is the total number of employees falling within the definition of "workman" under the ID Act, 1947, on average during the last 12 months from the date of issue of the notice?
3) Whether all the employees, including yourself, served with a notice of retrenchment (that's what actually the legal meaning of what you've mentioned as lay-off), are workmen or officers of predominantly supervisory capacity above the monthly salary of Rs. 1600/- or of managerial capacity?
These are the vital pieces of information based on which only appropriate answers can be suggested for further action.
From India, Salem
Hello Umakanthan,
Glad to receive your response. Hope this information will help:
1. Nature of the company: Internet Digital marketing and software services.
2. Total Number of employees: 300 to 500
3. About the notice: They have laid off 17 employees in October from the same project/unit. Now they have informed 5 employees, including me.
From India, Bengaluru
Glad to receive your response. Hope this information will help:
1. Nature of the company: Internet Digital marketing and software services.
2. Total Number of employees: 300 to 500
3. About the notice: They have laid off 17 employees in October from the same project/unit. Now they have informed 5 employees, including me.
From India, Bengaluru
Dear Parvez,
I understand that yours is an ITES Company coming under the State Shops and Establishment Act. From the particulars furnished, it is an industrial establishment subject to the provisions of Chapter V-B of the Industrial Disputes Act, 1947, in respect of Lay-Off, retrenchment, and Closure. Therefore, the Company has to get prior permission from the Appropriate Govt before resorting to such maneuvers affecting the employment of its employees falling within the definition of the term "workman" under the Act. If not, the orders of retrenchment will be illegal.
Unfortunately, the higher academic qualifications, sumptuous salaries, catchy designations, higher degree of employability both at home and abroad, etc., make all the employees in the field believe that they are not workmen and particularly leave the HR people of IT and ITES organizations with the misconception that their organizations are above the Labour Laws of the country. Even they refuse to accept that the contract of employment is a contract under the Indian Contract Act, 1872, and its unilateral termination has to be strictly according to its terms and conditions failing which they are liable to pay damages in the event of the affected person moving the Civil Court.
Irrespective of the amount of salary, all employees doing their work under the supervision and control of their superiors are workmen as defined under the ID Act, 1947. All other employees predominantly employed in a supervisory capacity above the monthly salary of Rs. 1600/- and in managerial capacity are "persons employed" under the State's Shops and Estt Act and as such their services cannot be terminated without prior notice and sufficient reasons.
Therefore, likely to be affected employees falling under the definition of "workman" may approach the labor officer for the area and make a complaint beforehand or even raise a dispute individually u/s 2-A(1) or 2-k of the ID Act, 1947, either themselves or through a trade union of general employees after retrenchment.
Others can prefer an appeal under the State Shops and Estt Act before the Appellate Authority designated under the Act or institute Civil Suits against the management for damages after their termination.
From India, Salem
I understand that yours is an ITES Company coming under the State Shops and Establishment Act. From the particulars furnished, it is an industrial establishment subject to the provisions of Chapter V-B of the Industrial Disputes Act, 1947, in respect of Lay-Off, retrenchment, and Closure. Therefore, the Company has to get prior permission from the Appropriate Govt before resorting to such maneuvers affecting the employment of its employees falling within the definition of the term "workman" under the Act. If not, the orders of retrenchment will be illegal.
Unfortunately, the higher academic qualifications, sumptuous salaries, catchy designations, higher degree of employability both at home and abroad, etc., make all the employees in the field believe that they are not workmen and particularly leave the HR people of IT and ITES organizations with the misconception that their organizations are above the Labour Laws of the country. Even they refuse to accept that the contract of employment is a contract under the Indian Contract Act, 1872, and its unilateral termination has to be strictly according to its terms and conditions failing which they are liable to pay damages in the event of the affected person moving the Civil Court.
Irrespective of the amount of salary, all employees doing their work under the supervision and control of their superiors are workmen as defined under the ID Act, 1947. All other employees predominantly employed in a supervisory capacity above the monthly salary of Rs. 1600/- and in managerial capacity are "persons employed" under the State's Shops and Estt Act and as such their services cannot be terminated without prior notice and sufficient reasons.
Therefore, likely to be affected employees falling under the definition of "workman" may approach the labor officer for the area and make a complaint beforehand or even raise a dispute individually u/s 2-A(1) or 2-k of the ID Act, 1947, either themselves or through a trade union of general employees after retrenchment.
Others can prefer an appeal under the State Shops and Estt Act before the Appellate Authority designated under the Act or institute Civil Suits against the management for damages after their termination.
From India, Salem
From the above details, it seems you will fall under the category of workmen under the ID Act and hence, the approval of the government is required for retrenchment on the 'last come, first go' basis. Retrenchment compensation has to be paid to you as well.
From India, Kolkata
From India, Kolkata
Hi Parvez,
Umakanthan sir has given a detailed explanation.
First, what you are talking about is called retrenchment under the law and not layoff. Layoff has a completely different meaning, which is that you are given a temporary suspension from work for a specific period due to management issues (meaning not your fault).
So the company has 2 options - terminate, retrench, or get your resignation.
The last is the simplest for them because they are not liable for compensation.
For termination, they have to give a reason, and a shortage of projects or work is not a reason. You can read other threads here about the procedure for termination (if you are curious about it); it's widely discussed.
In the case of retrenchment, again, they have to follow a certain procedure. The newest employees have to be removed first. And each employee is eligible for compensation of 15 days' salary for every year worked with the company. This is apart from the standard notice period salary (2 months in your case) that is stated in the appointment letter and available in all of the 3 scenarios.
If you want to fight, you can do so.
The method is already given to you in earlier posts by my seniors on the forum.
You can point out to the HR team that you know what the law is and will file a complaint if they don't give you the proper notice pay at least. In many cases, if the HR is smart, they will give you the full notice pay and close the matter.
On the other hand, if you do get a job easily, just take a clean relieving and move on because your next employer will want to do a background verification, and the current company will definitely give a negative if you have fought or threatened them.
From India, Mumbai
Umakanthan sir has given a detailed explanation.
First, what you are talking about is called retrenchment under the law and not layoff. Layoff has a completely different meaning, which is that you are given a temporary suspension from work for a specific period due to management issues (meaning not your fault).
So the company has 2 options - terminate, retrench, or get your resignation.
The last is the simplest for them because they are not liable for compensation.
For termination, they have to give a reason, and a shortage of projects or work is not a reason. You can read other threads here about the procedure for termination (if you are curious about it); it's widely discussed.
In the case of retrenchment, again, they have to follow a certain procedure. The newest employees have to be removed first. And each employee is eligible for compensation of 15 days' salary for every year worked with the company. This is apart from the standard notice period salary (2 months in your case) that is stated in the appointment letter and available in all of the 3 scenarios.
If you want to fight, you can do so.
The method is already given to you in earlier posts by my seniors on the forum.
You can point out to the HR team that you know what the law is and will file a complaint if they don't give you the proper notice pay at least. In many cases, if the HR is smart, they will give you the full notice pay and close the matter.
On the other hand, if you do get a job easily, just take a clean relieving and move on because your next employer will want to do a background verification, and the current company will definitely give a negative if you have fought or threatened them.
From India, Mumbai
I am experiencing a similar event now. My company is an ITES UK-based MNC, and I have been asked to resign effective immediately. My company is offering me 2 months' notice, as signed on the offer letter, but it includes a 1-month salary payout followed by my 2nd month's pay as F&F, which can be expected in 60 days. The reason provided is my profile is now required in the UK and not India. I have stayed in the UK and South Africa, doing project management for my company previously and worked as a Project Manager. However, they are not listening. My company has close to 500+ employees and has this culture of firing people with such reasons. We do not have any severance clause or entrenchment policy, and one of the business heads was fired last year with a false reason. When he cited taking legal action, they paid him a 3-month severance check on the spot and relieved him of all duties in one day.
I returned from South Africa in the last week of May and was planned to travel to Cape Town next month on the company's project and have got my VISA and all sorted. The client pays me a daily rate of 500 Pounds/day to my organization and has contractually agreed to have a Project Manager in SA for all of 2017. There is no resource in SA; however, I have been told to leave effective immediately as the role is now redundant.
Please advise. A similar incident has happened to another colleague of mine who has been asked to lay off immediately.
Regards, Praveen
From India, New Delhi
I returned from South Africa in the last week of May and was planned to travel to Cape Town next month on the company's project and have got my VISA and all sorted. The client pays me a daily rate of 500 Pounds/day to my organization and has contractually agreed to have a Project Manager in SA for all of 2017. There is no resource in SA; however, I have been told to leave effective immediately as the role is now redundant.
Please advise. A similar incident has happened to another colleague of mine who has been asked to lay off immediately.
Regards, Praveen
From India, New Delhi
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