Labour Laws that you always wanted to know
What are some of the questions related to labour law in India that you always wanted to know (probably something that your HR may not explicitly tell you) - Ask here!
Notice period for layoff in india? And how much should be the severance? (Mandated by the law in india)
And can companies force you to sign NDA about layoff
Notice period (or pay in lieu of it) is at least 30 days (or what's in your appointment letter which is higher).
If you are being laid off, and you are a 'workman' (simply put, without direct reports), you are eligible to recieve 15 days salary per every year of service or part thereof. This is called Retrenchment Pay and is mandatory as per Industrial Disputes Act. This is besides the notice period pay.
Employer cannot ask the employee to sign any one-sided agreements at the time of layoffs.
Do you need a good reason to fire an employee? Like a bad leaver, or a good leaver? Is there any documentation you do before making the decision?
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Experience Certificates
No employer can deny experience certificate to any employee in India. It is as per the Shops and Commercial Establishments Act (every state has one; mostly look-alike). In law, it is known as 'Service Certificate'.
In short, even if you have not returned those IT assets, have broken that 'bond' (which has legal standing in India), went absconding, killed someone and got terminated, or whatever - you are entitled to an experience certificate whenever you ask for it.
However, relieving certificate is different. It may be issued after due process at the org, after no-due clearance and such.
Is there any policy of Notice period? Now most companies have 90 days waiting period and do not allow employees to buy notice period? If someone do not serve complete notice period then can any company take any legal action, stop relieving letter, stop PF and Sue in the court?
1. No law related to notice period. If the employee is being retrenched, company has to give max of (30 days, what is in the appointment order).
2. If the agreed offer/appointment letter has 90 days, employees need to serve it. If not, companies can recover it (not from gratuity though).
3. Relieving letter can be delayed until compensation is paid/recovered.
4. PF can't be touched. They need to pay it for as many days in a month as the employee works, to the EPF fund by 15th of the next calendar month
5. If there are damages that the companies expect, they can sue in court. Many do not in usual cases since the RoI tells them that it's not worth it.
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I heard some people being laid off were not fired but asked to send resignation emails and in return they were paid 2 months notice period salary as mentioned in the offer letter.
As per my offer letter, my notice period is 2 months plus I have also accumulated around 33 days of paid leave that has to be encashed out to me. So in case tomorrow, I am asked by hr to either resign or they will fire, what should be the better option? If I resign, I think they will pay out 3 months salary (2 months notice period + leave encashment) but if they have to fire, am I entitled to anything extra?
I heard the hr said to people being laid off that it will be better for them if they resign since in background checks a firing will look bad. Suggest me what I do if it comes to that..
That's how HRs play. If it is a termination due to business reasons (=retrenchment), then they have to inform the government and take prior permissions. They circumvent this by making the employee write a resignation letter (typically they lure employees by citing the severance package, and they frighten folks of a potential bad reference check remark; poor culture, I would say. They are frightening the employees who worked for them. Loyalty dies).
If you resign what you mention above is what you get. My advise would be to judge it based on what they offer in case of resignation vs retrenchment (the latter has retrenchment pay that is legally due to the employee + leave encashment + gratuity it eligible). Retrenchment pay is 15 days salary for every year of service.
PS: HR here.
The thing is I heard from the people who got laid off a few weeks ago that they were not really told if they will be given something extra in case they do not resign and the company has to fire them. They were still giving only what's written in the offer letter plus any leave encashment. Do they really need to do that government approval thing, I mean companies do remove employees for performance issues all the time and I think they do not pay any retrenchment in that case either?
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Is it legal to lay-off/retrench employees over e-mail and cease access to internal systems with immediate effect?
Nothing illegal in it as long there are communications sent to the employee about the retrenchment.
Droughtbear
Student
2 years ago
How did all these companies go around not playing overtime? IT firms say 48-50 hours per week, we all know how that works.
Force of culture. World has evolved that way in the knowledge economy. It mostly works so in Asian countries (especially eastern).
Droughtbear
Student
2 years ago
Doesn’t it have anything to do with the act associated with companies? Like factories act mandates overtime and pay for overtime. Nothing like that for IT, service industry as far as I know.
Tricky. You can take it up with appropriate person in the org about your work life balance. You are, per law, not needed to work beyond what's agreed. Culture however differs.
Darius
Student
2 years ago
Hi. Thanks for your efforts.
My question is: as someone who is not from law background, how can one learn all about his work rights (as a white collar worker). Any books/videos/blogs/anything else that you would suggest?
Thanks
There are many YouTube videos and I have watched some - I don't recall any channel in particular. I just youtube it whenever I need it. Unfortunately, there's no book that I am aware (having said that I am writing one; planning to publish it after the new labour codes are in place. But it won't mostly be for employees but for CxOs who aren't from legal backgrounds. Employees usually do not 'read' such books; videos may fly).
Having said this, this will be a good read to start with: https://www.legalserviceindia.com/legal/article-4220-a-summary-on-existing-labour-laws-in-india.html
There's a website called CiteHR that's kind of stackoverflow for HRs. But beware, people comment their without any validation; not everything you see on CiteHR is accurate. You may even come across a post on CiteHR that says 'Einstein once said: everything that you see on internet is not true'.
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BlackSorbet
Stealth
2 years ago
What happens to the gratuity amount if a person is layed off before completing 5 years of service ?
Unfortunately, gratuity doesn't get paid.
Employee needs to complete (except in case of death) 4 year 240 days of continuous service to be eligible for gratuity (it is not 5 years).
BlackSorbet
Stealth
2 years ago
So there are no laws from the government protecting gratuity in case of retrenchment?
chakbodi
Stealth
2 years ago
What happens when a company shuts down without paying full and final settlement of employees who resigned and those who were laid off? What rights or protection do employees have?
Employees can approach the Asst Labour Officer/District Labour Officer for resolution. They will get in touch with the company directors to settle the matter. If the company has gone bankrupt, I'm afraid there's much of a resolution left.
chakbodi
Stealth
2 years ago
Is there any provision for delayed salaries?
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Maternity Benefit
Women employees are entitled to full salary for 182 days while on maternity leave. In addition to this, they are entitled to Rs. 5000/- Maternity Bonus from the employer (one time per maternity). Most employees are not aware of this bonus (where prenatal care is not provided by the employer - which almost all employers in India do not provide; hence they have to pay this bonus to the employee).
Additionally, if you are contributing to the Labour Welfare Fund (check your payslip), then you may get an additional sum from the welfare fund board if you are on maternity leave (provided you are not an ESI employee). Check with your HR for the process.
incognito
Stealth
2 years ago
If someone joins my company and 3 months later (while on a PIP) states that they are applying for 182 days leave for maternity. Can I still fire them or am I screwed. Asking for a friend.
When someone has completed 80 days (in the past 12 months) of service with the company, they are eligible for the Maternity Benefit.
To answer your question, do not fire the employee. Arrive at an amicable solution discussing with the employee. Even if you fire for performance, and if the employee goes to court, court will rule in favor of the employee.
incognito
Stealth
2 years ago
They joined my org at a CTC of 60L+ and showed up to work perhaps 3 days a week with zero productivity. As soon as we put them on a PIP they asked for maternity leave.
Their contact also has a 5L bonus after 6 months. Do we still need to give it?
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PunyDrama38
Stealth
2 years ago
ageism in IT industry
I am not sure about the question here. If this is about ageism is illegal, there's no significant law in India about this being a discrimination. Companies can form arguments to their favor which are tough to be questioned in courts of law. Sadly, this is true.
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