“Company has Right to Terminate Employment any Time” – True or False?

This entry is part 3 of 9 in the series IT Life II

Shyam Sundar who is a part of NDLF IT Employees Wing is having around 20 years of experience in information technology. He wrote an article series on “IT employees Life Fun or Problems” to create awareness about various issues faced by IT employees. This write up is third part of Series 2.

In the first two parts, we have seen in detail about organization asking individual employees to resign. As I mentioned earlier, this is the most common way of companies showing exit doors to the employees. Here action is required from employee and if employee resists to resign, there is high a chance employee can survive with legal support.

As an example for mass forced resignation, we can mention Verizon layoffs last year. There are many media reports on Verizon retrenching employees. As per media reports, retrenchment happened in Verizon in the following manner:

  1. Employees were called for exit interviews and asked to sign resignation letter.
  2. Company offered 1 month salary for every year of experience the employee has put in the company. For example, if an employee had worked for 15 years, he is paid 15 months of gross salary as part of final settlement in addition to other retirement benefits. The company deducted tax for this final severance amount as per employee tax slab and paid the remaining amount.
  3. Company used doctors and psychiatrist to counsel employees to accept the settlement offer.
  4. If any employee resisted to resign, bouncers were used to make them sign the settlement forms; after completing settlement process employees are escorted to outside gate by these bouncers.
  5. Here company did not give any time for employee to consider their ‘offer’.  They are taking chance of terminating without following any retrenchment procedures formulated by law.

Later when company was asked about this bulk retrenchment, they denied the usage of bouncers. They mentioned no manhandling of staffs was done and claimed the retrenchment was part of internal transformation exercise.

Now we will see how to handle such a situation if we face it in our life:

  1. Here there is no time given to the employee to think and come back. So if they ask to sign any documents, refuse to sign such documents. Consider for example, if any stranger is forcing you to transfer your property in your name, you will resist to sign such documents. The same principle applies here and don’t sign any documents.
  2. If they do manhandling and use bouncers to force you sign the document, resist as much as you can. But if you are physically forced, then sign the document. But after your exit, complain immediately in the nearest police station. If you have any injuries sustained during this process, seek medical advice and record such incidents.
  3. If more employees are affected, try to form group to make your complaint stronger.
  4. Approach NDLF to seek legal support. You can also form a group yourself and file petition in labor office.
  5. If company is asking to surrender laptops or any belongings of the company, handover it to the company in a peaceful way.
  6. If they deposit any money in your bank accounts, mention that company deposited this amount and it can be set off against future salary, when you get reinstated with back salary.

In the Verizon incident, employees formed larger groups and filed petition in labor office. These cases are filed in Chennai and Hyderabad regions. I am sure the judgement of these cases will put a hard stop to such retrenchments.

Definitely this part of retrenchment is more painful. Here employee who are working in the company for several years will be out on single day. The employees will not be getting salary from next month. Labor unions will play vital role in helping employees managing this situation. It will be very difficult to digest termination but here employees are left with no choice. So believe in collective fight, consult with any lawyers who are your friends/relatives, join labor unions and take up the fight against the companies.

The major disadvantage of legal fight is that they are usually time consuming, but your determination to take  up the fight matters a lot for getting your job back. Even now, we have Ramesha vs HCL as the only case where we received judgement and as per the judgment Ramesha is reinstated with back wages. He got all his salary when he has taken the legal battle and reinstated back to the company as per the judgement. So don’t over react to the situation; proceed with legal battles; avoid mental pressures during this crisis situation; definitely you can contact NDLF union to overcome this stressful condition.

India has strict labor laws won by years of struggle by workers.  Believe in the legal route and the power of collective fight. This is only route to get justice as a common employee against powerful corporates.

The following are the myths created by IT companies repeatedly to the employees:

  1. Myth:  Employees can be terminated based on performance.
    Reality : Employee cannot be terminate based on performance. Company has to give training and take necessary action to upskill employee performance and they are not allowed to terminate based on alleged performance issue. If termination is allowed in legal system, all sectors will provide low ratings to employees above 40 years old to cut cost and entire Indian economy will go for toss.
  2. Myth : Hire and fire is followed in IT industry.
    Reality : But as per law, it is not allowed
  3. Myth : If employees can switch jobs for 5% salary hike, employer also has the right to terminate employees.
    Reality : Legally companies are allowed to retrench, but they have to follow retrenchment procedure as per legal norms by getting consent from labor department
  4. Myth : The company is terminating employees as they are not upskilling themselves for new digital technology and automation.
    Reality : If company recruits 12th standard student and believe they can make them work under digital technologies, how an experienced employee cannot upskill. It is the responsibility of the company to provide training and upskilling activities and termination is not the solution for upskilling delays
  5. Myth : As an employer, you can terminate maids, drivers and other workers working for you. The same way company can also terminate.
    Reality: This is really amateur comment. A domestic helper is not employed for profit making activities.  (In many countries there are strict laws regulating employment of domestic helpers also). But a worker in organized sector earns profit for the company and company has to follow legal route for retrenchments.
  6. Myth : Managers and Human resource officers are responsible for all termination.
    Reality : Manage and HR are doing their job. Orders are coming from top management.
  7. Myth : I will not be affected by layoff as I am very critical employee in my project.
    Reality : But if company makes decision, they can initiate termination process for anyone.
  8. Employee unions are not allowed in information technology sector.
    Reality : There is no such thing. Like any other sector, information technology also has union

Knowledge is wealth and gain this important knowledge on how to protect your job to have a happy IT life. We will see in detail on the procedures to be followed when terminated as part of compliance in next part.

– Shyam Sundar

Series Navigation<< “Clean Exit” – Sacred Cow of HR and EmployeesCompliance Violation and Termination – Facts to Know >>

Permanent link to this article: http://new-democrats.com/it-life-fun-or-problems-ii-3/

1 comment

    • K.V Sreenivasan on July 27, 2018 at 12:00 pm
    • Reply

    Even though our Constitution guarantees the right to employment and its continuance up to the superannuation age of 58/60 none of the employer had followed the laws or the judgment given by the Courts. This is our fate, even the government undertakings/cos are not followed this Constitutional rule/laws and terminates their employers according to their choice of the higher bosses. We will join together and raised our voice to upheld the constitution. this is the only way to safeguard the interest of the innocent and honest employees.

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