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HonestEmployee (Private)     15 March 2024

Company terminating without paying proper compensation

Context

I was working in a startup located in Gurugram (registered in Orissa). Joined on July 31 2023 - total headcount is less than 50 people. And this 31st Mar, they were supposed to pay performance bonus of 1 lakh on pro-rata basis. They terminated around 10 people citing business model change and our services are no longer required (effective from 14th Mar). I was on approved leave when this happened 8-18 March.

Communication from company side (sent on 15th Mar)

Sent mail with subject - Layoff -> considering 30 days notice - asking us to work for 15 more days (till 29th Mar) and 15 days 'paid leave' (till 12th Apr). And leaves taken during this period will be unpaid.

Offer letter

As per offer letter, 45 days notice has to be given for termination. and bonus to be paid on 31st March on pro-rata basis.

Questions?

  1. should i work for 15 days from 14 - 29 Mar?
  2. can they call period from 30 Mar - 12 Apr 'PAID LEAVE'?
  3. what is considered as date of termination - 13th Mar or 12th Apr??
  4. how much termination pay am I eligible for? (45 days notice period)
  5. am I eligible to get bonus? (for 8 months i worked)
  6. what exactly is notice period in case of termination? for affected employees to find job or for employer to get pending job done?
  7. what is the best time to take legal action - right now? or later (when?) 
  8. where can i lodge complaint? (options in mind as of now - https://hrylabour.gov.in/complaintpannel)

Looking forward for assistance. Thank you



Learning

 2 Replies

T. Kalaiselvan, Advocate (Advocate)     16 March 2024

layoff is a measure that is used only in continuing businesses. If the employer decides to permanently shut down his industrial establishment then layoff is of no use. Layoff must adhere to the conditions provided in Section 2 (kkk) of the Industrial Disputes Act, 1947 or else it will not be considered right as per the law. There must exist an inability, failure or refusal from the employer’s side to provide employment to the workmen. Such inability, failure or refusal must be due to lack of power, coal, raw materials, accumulation of stocks, breakdown of machinery or natural calamity for any other relevant reason. The name of the workman must be mentioned in the muster roll of the employer’s industrial establishment. The workman must not have been subjected to retrenchment.

 industrial establishments with over 100 (hundred) workmen and those that are not seasonal in nature. In such cases, employers must obtain prior permission from relevant authorities stating the reasons for layoff.
As per this Act, every employee who has been in continuous service for at least one year is entitled to retrenchment compensation. This compensation is calculated as 15 days of average pay for every completed year of continuous service or any part thereof in excess of six .

Conditions precedent for providing compensation to a laid-off workman As per Section 25C of the said Act, the workman who is laid off is entitled to compensation that is equivalent to half of the total wages and allowance given for the said period of lay-off. As per Section 25A, the compensation accrued from the layoff provisions mentioned in the said Act shall not apply to the following kinds of industrial establishments :

Such industrial establishments where less than 50 workmen worked on an average during each working day in the preceding calendar month. An industrial establishment where work is done seasonally or occasionally. An industrial establishment that comes under the aegis of chapter V-B as included by the Industrial Disputes Amendment Act of 1976.

 

HonestEmployee (Private)     16 March 2024

hi sir, sorry to say, but this is the most useless response. i would not recommend to hire you. entire scenario is clearly explained with questions, and you are just copy-pasting from id act and other documents. whats the point?

 


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