I’m part of large Indian IT organization based at Bangalore far last 11 years and having more than 24 years of overall experience. I have been recently told to leave the organisation despite good performance and I'm suspecting this because poor business performance by company and general slowdown sweeping across IT industry. Reason given is that if a person is in same position (seniority band) for more than 8 years, he/she has little potential to skill upgrade and hence will have to leave. For these cases yearly performance of the employee is overridden and HR is asking respective managers to forcefully lower down the actual ratings regardless of the outcomes of the yearly targets defined, which are clearly articulated and are based on defined measurable numbers. Pls note that since outcome is measured on quarterly basis and is well recorded in the system, you are very well aware about your overall yearly performance based on last 3 quarters ratings. In my case, overall yearly rating is intentionally lowered to meet management retrenchment targets despite having good recorded performance. Also no prior warning/training were given to support the logic of lack of skill upgrade. I’m hearing that the similar treatment given to many senior employees like me. Advantage of forcing employees to resign is to avoid any retrenchment related negative publicity and related legal challenges. If an employees agree to resign on their own…it’s considered as general attrition and in turn he/she will get relieving letter with good comments on work done along with 2 months notice period. If person refuses to resign, HR is threatening them for termination. This means one is deprived of proper experience/relieving letter and notice period resulting in permanent blot on your career. Pls let me know the legal opinion/option according to the Indian law- 1. is there any legal case/precedence on the past where employees were forced to resign or terminated, even if the recorded yearly defined performance was good and in line of the targets defined and there was no misconduct justifying terminations? 2. If employee refuses to resign, whats the option company have? Can they legally terminate employee? if they do so, whats the legal option employee has? 3. is there any legal case/precedence on recent past where where any company because of poor business outcomes decided to go for retrenchment route and impacted employees were given proper compensation? If yes, how the compensation was calculated?
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If employee refuses to resign company would terminate your services
2) company can justify your termination on grounds that your performance has been poor and hence your services terminated
3) you would be entitled to compensation as per terms of the appointment letter
4) madras high court had in 2015 restrained IT company from terminating services of software analyst on grounds that he is workmen
1. Retrenchment can be defined as an activity to legally terminate any employment contract with the employee by offering a compensation package. Such offer to retrench may come into as mutual acceptance or forced upon by one party which of course would be the employer. A strategy used by corporations to reduce the diversity or the overall size of the operations of the company. This strategy is often used in order to cut expenses with the goal of becoming a more financial stable business.
Thus it cannot be said that the employees with god performance and good conduct cannot be forcibly retrenched.
2. S. 2 (oo) of The Industrial Disputes Act, 1947 defines the term in the following words : • • (1) Retrenchment means the termination by the employer of the service of a workman ; • (2) The termination may be for any reason whatsoever; • (3) But the termination should not be as a measure of punishment by way of disciplinary action.
RETRENCHMENT COMPENSATION and THE AMENDMENTS • the employer has discretionary power to retrench the employees. Thus it is clear that the workmen without any fault are deprived of their right to work but they are compensated for this.
To aproach labor court for this action is the right of the employee
3. There are plenty of such court decision on the line you have enquired, you may browse for the same in the internet.
Hi,
Your issue needs to be discussed in detail as it is related corporate and your defenses are hard to be proved in court.But, in many cases the indian courts favored employees.
Based on your query, i am able to give some inputs as below.
There are many cases that employer can not ask its employee to resign or to terminate, just because of poor performance and there was no misconduct.
If they ask you to resign forcibly then you would need to send legal notice asking for the ground. So, that we can look into the grounds. If they terminate your legally then they suppose to send your legal notice.
Thanks,
Adv.Niranjan,
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