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Mahi   22 February 2017

Pharma mnc illegal separation package---- is it legalise?

Dear All,

                   Pharma MNC is restricting its operations in India and for that adopting following procedures

1- In order to reduce the employees number company is giving two options and communicating with employees through company webprtal orally  through video conferencing .Options are either  qualifying for vacant HQ  through interview as skills required are different   and taking telephonic interview  and rejecting ,means just to legalise if employee challenge it in the court (means employees are asked to attend video conferencing interview and at the end rejecting ,citing skills are not matched)  or take separation package. Company main objective is to offer all these employees (approx 100  employees)  separation package .Those employee who are accepting separation package they are being offered, 45- days salary into number of years served plus all other benefits like gratuity, leave encashment and PF withdrawal.

1----Company is sending a agreement on plain papers (not letter head nor stamp paper) and asking the employees to sign the same to get your money released.In said letter it is written certain conditions like employee is voluntarily seeking separation , agreed with full sense and maturity, employee will not go the court and after signing this employer employee contract stand cancelled --------------------  What is the legal standing go this document?

2----Most of the employees are not in a position to survive legal fight and preferring to accept the same and looking out for other employment ---------------------------- Can the employee after signing this and receiving the separation amount from the employer can knock the door of the labour court  for justice .

3---- all employees are workman and working with the company for the last 20 years and company is earning profits and had taken no permission from govt. authorities to reduce the employees number, means doing all this illegally.--------------------Can the employees suit the case before the labour office even after receiving the separation money?

Regards

mahi, Delhi

 



Learning

 27 Replies

Vijay yadav (Law student)     23 February 2017

Completely illegal process is being followed by company and as answer of agreement between the parties, Agreement is void being effected by undue influence of employer. Even in case of retrenchment, a proper procedure needs to be followed. Yes, Court can be approached evenafter of signing of agreement. For more: contactvijayyadav@gmail.com

Mahi   23 February 2017

Thank you mr. Yadav will contact you shortly

regards

Ritesh Maity (Labour Law Advocate)     23 February 2017

Since the company has more than 100 employees, permission of Government is required before retrenchment. There are also legal procedures which need to be followed in case of retrenchment. But if the company is providing "45- days salary into number of years served plus all other benefits like gratuity, leave encashment and PF withdrawal" as compensation then I don't think it is bad.

Query 1 -  No agreement can stop you from going to court.

Query 2 -  Employees can move to court even after acceptance of separation money.

Query 3 - Yes you can always go to the court.

Mahi   23 February 2017

Dear Mr.Ritesh G,

                              Better answer from your side with total clarity and same was expected from you,thanks a lot .

regards

mahi Delhi

Kumar Doab (FIN)     23 February 2017

It is clear that employer is unwilling to continue with vintage staff.

Kumar Doab (FIN)     23 February 2017

The severance package @ 45 days salary/year instead of 15days/year is better.

Gratuity, Leave encashment, Bonus etc etc are otherwise also, payables.

If PF is with EPFO, the funds in PF a/c are not in control of employer.

After signing the agreement employee can agitate on defects, in agreement, if any.

Employee is separating voluntarily.

What is the point in litigating later also?

Why can’t employee(s) take clear decision?

What is the opinion of your state/national unions?

How are you involved in this matter?

  

Kumar Doab (FIN)     23 February 2017

If all employees know the market and trade well, are highly experienced, have been performers, can start their own venture.

 

It is just a suggestion.

Mahi   23 February 2017

Hi kumar G,

                     I have nothing to do with this only the employees are my colleagues and wanted to know the legality of said separation .

1---- Yes employees are voluntarily signing it because employer is not giving them any other option .

2--- Union are asking to reject the same and let the company do what so ever it decides,  will knock court door , but most of the employees are not coming to union lines reason being 45 days  salary is not bad option.

3---- it is also true people are venturing into their own business ,but few are financially weak and have kids higher education fee burden .

regards

mahi delhi

          

Ritesh Maity (Labour Law Advocate)     23 February 2017

Make sure that the employer does not make any excuse to delay the payment once settlement is done. It is better to settle the entire issue at once, if possible.

Kumar Doab (FIN)     24 February 2017

It is bit surprising that vintage employees of MNC that usually have high salary are not financially sound.

Take screen shots of web portal and anything else that can establish that it was asked by company.

Record/Obtain copies of Video Conferencing.

Minute these date wise by emails (attach record) from personal email id to official email id’s of the company (including one mentioned at website).

Include Unions members/Labor officials in all record of all transactions and discussions, negotiations, under proper acknowledgment.

This is to establish intent of the company for initiation of separation from its side that can be interpreted as ‘Termination’, Retrenchment, or VRS etc!

Kumar Doab (FIN)     24 February 2017

Is any employee from AP also involved?

Each activity leaves its footprints, including on cyber pathway.

However if proper record is built the need of any courts and tedious and time consuming acts like; Forensic examination can be avoided.

Include all performance related benefits, pending increments, reimbursements etc and submit claims for payments and obtain written consent to pay.

It is just a suggestion.

Kumar Doab (FIN)     24 February 2017

Assuming that it is MNC and salary is high staff is vintage staff.

For hypothetical calculation: say Monthly salary is: Rs.25000/pm (and Basic+DA is also same) and vintage is 20years.

Per day: 25000/26=Rs.962/-

45days=Rs.43290/-

20Y=Rs.878400/-

Gratuity={(Basic+DA)/26*15*20}= Rs.288462/

PF= Calculate yourself and relate with PF a/c slips of each year.

Obtain PF number/a/c slips of each year and all monthly salary slips, Form 16.

You have not mentioned about ESIC. Include it.

Relate with each year and check if covered and if provided or not.

Also visit ESIC and count the benefits: e.g; salary in case of unemployment, coverage even after retirement (for self and spouse) @ say Rs 120/annum ONLY. There is NO match of ESI.

With the conditions laid by company would you remain covered for ESIC?

Kumar Doab (FIN)     24 February 2017

While company is not letting you have evidence you need it to agitate on defects, if any.

If all vintage employees are exhausted and are unwilling to negotiate further then try to make company agree on payment in one go within dated............as suitable, to you.

Document everything.

Mahi   24 February 2017

Dear Mr.Kumar and Mr.Ritesh,

                                                  First of all happy MahaShivaratri.

1- Yes the separation amount is coming handsome and respectable plus all other benefits includes Leave encashment, PF and gratuity.

2---Employer is very  smart and given all the vintage employees the agreement letter through mail and asked them to sign original and reply back your acceptance.Those who had applied for yes to separation option are next day told by phone by HR to send resign also along with separation  agreement duly signed .

3-- One thing is sure employer is trustworthy in releasing the payments as per commitment , means on this parameter they are honest.

4--- All employees are given Medical insurance cover by Oriental Insurance Co,  and same will be null and void the day you resign.Employer is not deducting any Esic or giving any Esic card.Can you please elaborate how to bargain on this.?

5----Regarding evidence through recording or video clipping ,employer is not giving any opportunity in written ,which proves that it was asked by the employer.

6----your suggestions are appreciated and will talk to colleagues to collect the same, but of no use because employees are accepting the amount and finding the employment in other companies or self business, not interested to sue legal.

regards

mahi


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