Victor (Manager) 18 August 2021

Severance pay in hyderabad , mnc.

Experts, Have a query on severance pay to the employee when the employer (America based AMC) decides to terminate the employee after 10+ years of service citing rationalization in the organization. So is the employer liable to pay severance and any standard rule or guidelines given by the law or ? Kindly help in answering.

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G.L.N. Prasad (Retired employee.) 19 August 2021

In India, there is no such procedure of termination on the basis of rationalization through an employer is having such powers to terminate with 90 days notice. In India, termination of an employee on this ground by giving notice or 90 days salary is rare. The practice in India is Announcing Voluntary Retirement Scheme after explaining that those who do not opt are liable to be terminated due to rationalization. You can call for a copy of the agreement with the employer that specifically states such condition of termination in the name of rationalization. The common knowledge is that American companies are not having such rules and regulations of regular employment as existing in India. Normally such terminated employee receives the orders stating such clause in the agreement that empowers the employer to terminate the employee in the name of Rationalization and jurisdiction of disputes.