Employer forcing all staff to resign before Diwali, what are my rights?

Question

I'm working in a tech firm in Bengaluru. Out of nowhere, the management has asked all employees to resign by next week, just before Diwali. They are not offering any severance package or valid reason. I've been here for 3 years and am worried about my livelihood. Can they do this without any notice? What are my legal rights under Indian Labor Law?

Adv. Ramesh Srinivasan · Accepted Answer

No, they cannot do this without following due process. Under Indian labor law, specifically the Industrial Disputes Act, 1947, there are clear provisions regarding termination of employment. If your employer is asking you to resign without notice or severance, they are likely violating these provisions. Firstly, let's address the notice period. As per the Industrial Disputes Act, 1947, any termination of employment for workmen in an establishment that employs 100 or more workers requires at least one month’s notice or payment in lieu thereof. This is under Section 25F of the Act. Since you are in a tech firm, which may not fall under the traditional definition of "workman," your employment contract and the Shops and Establishments Act applicable in Karnataka will guide the notice period required. Secondly, the arbitrary demand for resignation without severance or valid reason can be challenged. The Karnataka Shops and Establishments Act mandates that the terms of service should be in line with the state-specific rules. If your employment contract or the company policy mentions a severance package, the employer must adhere to it. In the case of Delhi Transport Corporation vs. DTC Mazdoor Congress (1991), the Supreme Court held that termination of services without a valid reason or due process is illegal and arbitrary. This judgment reinforces that employers cannot unilaterally terminate employment without adhering to the legal framework. Here's what you should do: Review your employment contract for clauses related to termination and severance. Check if your firm has a policy document or employee handbook that outlines termination procedures. File a complaint with the local labor commissioner if the company proceeds without following legal requirements. Consult with a labor lawyer to explore the possibility of challenging the termination in court if necessary. Do not delay in taking action. Labor disputes have limitation periods, and it's crucial to act swiftly. Get

Adv. Rahul Sharma · Answer

I'm sorry to hear about this stressful situation. It must be quite unsettling to face such uncertainty, especially around a festive time like Diwali. To directly answer your question: No, your employer cannot legally force you to resign without providing a valid reason or following due process under Indian labor laws. Under the Industrial Disputes Act, 1947, specifically Section 25-F, if an employer wants to terminate an employee who has been in continuous service for at least one year, they must provide: - A notice period of one month or pay in lieu of notice. - Compensation equivalent to 15 days' average pay for every completed year of service. Since you have been with the company for 3 years, these provisions apply to you. Here are the steps you should consider taking: Do not resign voluntarily. If you resign, you may lose your right to claim severance or other benefits. Request a written explanation from your employer about the reason for this mass resignation request. If they do not comply with the legal requirements, you can file a complaint with the Labor Commissioner in Bengaluru. This is a crucial step to ensure that your rights are protected. Document any communications with your employer regarding this matter. This includes emails, messages, or meeting notes. Consider reaching out to your colleagues to see if they are willing to join you in filing a collective complaint, as this might strengthen your case. In my experience, courts generally view forced resignations

Adv. Sanjeev Malhotra · Answer

I'm sorry to hear about your situation. Under Indian labor laws, employers cannot arbitrarily force employees to resign without following due process. Let's break down your legal rights and options: 1. Employment Contract and Notice Period: First, check your employment contract for any clauses related to termination or resignation. Typically, contracts include a notice period which the employer must honor. If the employer is forcing resignation without notice, it may be a breach of contract. 2. Industrial Disputes Act, 1947: If you are classified as a "workman" under the Industrial Disputes Act, 1947, you have additional protections. The Act mandates that employers provide a notice period of one month or pay in lieu of notice for retrenchment. Moreover, retrenchment must be conducted following the "last in, first out" principle unless there is a justifiable reason otherwise. 3. Shops and Establishments Act: In Karnataka, the Karnataka Shops and Commercial Establishments Act, 1961 is applicable. This Act requires employers to provide a notice period or compensation in lieu of notice before termination. Ensure that your employer complies with this Act. 4. Legal Remedies: Immediate Action: Write a formal letter to your management seeking clarification and stating that you do not wish to resign voluntarily. Document all communications. Labour Commissioner: If there is no resolution, you can file a complaint with the Labour Commissioner’s office in Bengaluru. They can intervene an

Adv. Usha Krishnan · Answer

In situations like this, it is crucial to understand your rights under Indian labor laws and the legal recourse available to you. Under the Industrial Disputes Act, 1947, and other relevant employment laws, there are protections in place for employees against arbitrary termination. Firstly, if your firm employs more than 100 workers, it is classified as an "industrial establishment" under the Industrial Disputes Act, 1947. In such cases, the employer is required to provide a notice period of at least three months or pay in lieu thereof before laying off employees. Additionally, they must obtain prior permission from the appropriate government authority before proceeding with such layoffs. "No workman employed in any industrial establishment shall be retrenched by the employer until the workman has been given one month's notice in writing indicating the reasons for retrenchment and the period of notice has expired, or the workman has been paid in lieu of such notice, wages for the period of the notice." If your company falls outside the scope of the Industrial Disputes Act, the terms of termination should be as per your employment contract. Typically, contracts include a notice period clause, which must be honored by the employer. Failure to do so can be considered a breach of contract, and you may be entitled to compensation. Furthermore, the Payment of Gratuity Act, 1972 mandates that if you have completed at least five years of service, you are entitled to gratuity. However

Employer forcing all staff to resign before Diwali, what are my rights?

Report Content