Involuntary separations occur when management decides to terminate its relationship with an employee because of either economic necessity or a poor fit between the employee and the organization. Examples of involuntary separations include discharges, layoffs, and downsizing or "right"-sizing (a term used by firms to make downsizing appear more palatable, generally positioning it as an attempt to make the firm the "right" size for its needs by implementing layoffs).
 
 
Dismissal of employee

Usually, this process is perceived negatively by employees. An employer uses his right to terminate the contract of an employment. There can be many reasons for an employer to terminate the contract of employment but some of the common reasons are: 
  • Non-Performance
India's largest software services provider TCS  axed 1,000 jobs in the country due to non-performance by its employees. Jan 15, 2015,  PTI
  • Indiscipline
  • Misconduct
  • Insubordination
  • Theft and etc.
In the United States More than 25% of employers have terminated employees for misusing the Internet, according to a recent American Management Association survey. Recent surveys of Internet use in the workplace indicate a majority of workers use these tools for personal use. Management experts suggest organizations should have a written computer usage policy with specific consequences for violation.

Wrongful dismissal will tend to arise first as a claim by the employee so dismissed. Many jurisdictions provide tribunals or courts which will hear actions for wrongful dismissal. A proven wrongful dismissal will tend to lead to two main rremedies: reinstatement of the dismissed employee, and/or monetary compensation for the wrongfully dismissed.


Back Wages can't be claimed as Right of employee on reinstatement in service, Supreme Court of India


IN THE SUPREME COURT OF INDIA CIVIL APPELLATE JURISDICTION

CIVIL APPEAL NO.1756 OF 2010


Rajasthan State Road Transport
Corporation, Jaipur …..Appellant(s)

VERSUS

Shri Phool Chand(Dead)
Through L.Rs. …..Respondent(s)


Judgement : View  Download

‘A workman / employee has no right to claim back wages from his employer as of right only because the Court has set aside his dismissal order in his favour and directed his reinstatement in service.’

The Supreme Court has held that the back wages could not be awarded by the court as of right to the workman consequent upon setting aside of  employee dismissal / termination order.

In the first case the appellant, Rajasthan Road Transport Corporation, dismissed their driver Phool Chand from the service on the ground of dereliction of duties on various occasions while he was in the course of employment. The charge against the Phool Chand was his continuous absence from the work, which was proved.

Rajasthan State Road Transport Corporation vs. Shri Phool Chand, the Labour Court converted the punishment awarded to a driver (employee of the corporation) of removal from service to that of “stoppage/forfeit of four annual grade increments without cumulative effect” and directed the reinstatement of the deceased workman in service with award of full back wages for 13 years. As the high court dismissed the challenge against this order, the state assailed it before the apex court.

The bench comprising Justice Abhay Manohar Sapre and Justice S Abdul Nazeer observed that a workman has no right to claim back wages from his employer as of right only because the court has set aside his dismissal order in his favour and directed his reinstatement in service.

Initial Burden On Employee To Prove Entitlement To Back Wages It said:

“It is necessary for the workman in such cases to plead and prove with the aid of evidence that after his dismissal from the service, he was not gainfully employed anywhere and had no earning to maintain himself or/and his family. The employer is also entitled to prove it otherwise against the employee, namely, that the employee was gainfully employed during the relevant period and hence not entitled to claim any back wages. Initial burden is, however, on the employee.”.

However, the bench invoked Article 142, in this case, to award 50 percent of total back wages, taking into account the period and money spent in litigation by the deceased workman and, upon his death, by his legal representatives.



Hate tweets cost Delhi man his job
ET Bureau
May 15, 2018


A Delhi-based employee of a multinational company was made to quit after he was found to have sent abusive tweets against a particular community.

The J&K police has initiated an investigation against the man, Ashish Kaul, while social media platform Twitter has suspended his account. Development Dimensions International, a US-based HR consultancy firm, said as soon as it got to know about the tweets, it suspended the employee and launched a full investigation, following which it accepted his resignation. “DDI was alerted to the fact that an employee who worked as a consultant in India had made statements on social media that condoned violence against members of the community in the Kashmir region,” it said in a statement. The nature of the posts was in violation of the company’s mission and values, DDI added.

Employees are coming under increased scrutiny over what they post on social media platforms, some of which are resulting into termination of their work contract in cases where they are found to be propagating hate. Recently, Kotak Mahindra Bank sacked an employee over his remark on the Kathua rape. In April last year, a Dubai-based firm fired an employee after he was found to have abused a female journalist on Facebook.


India, Maruthi Suzuki India, Ltd.  violence 
18,July,2012: Maruthi Suzuki India Ltd.,general manager human resource was burnt to death at manufacturing plant located at Maneser (Haryana) by the workers in a dispute between workers and management due to the disciplinary action taken against worker by the management. Workers union alleges that this incident was caused due to the supervisor made objectionable remark against a permanent worker, who belongs to the Scheduled Caste category. When we opposed it, they misbehaved with us and suspended the worker that led to violence. Company had huge loss of property, damage and burned, police complaint was filed and the Indian penal code (IPC) against  the workers who indulged in violence, killing general manager, severely hurting almost 100 workers and 40 executives and managers. Companies top Management decided to dismiss the workers who ever involved in these activities and declare that there is no further reinstatement of dismissed employees.
 
 
Termination of employee

Termination of employee means removal of employee from employment by his employer mainly on the following grounds,
  • Termination of employee due to the expiry of employment contract period between employee and his employer.
  • Termination of employee due to the Ill-health of the employee.

Being terminated for any of the items listed below may constitute wrongful termination:

  • Discrimination: The employer cannot terminate employment because the employee is a certain race, nationality, religion, sex, age, or in some jurisdictions, sexual orientation.
  • Retaliation: An employer cannot terminate an employee because the employee filed a claim of discrimination or is participating in an investigation for discrimination. In the United States, this "retaliation" is forbidden under civil rights law.
  • Employee's Refusal to Commit an Illegal Act: An employer is not permitted to terminate an employee because the employee refuses to commit an act that is illegal.
  • Employer Not Following Own Termination Procedures: Often, the employee handbook or company policy outlines a procedure that must be followed before an employee is terminated. If the employer fires an employee without following this procedure, the employee may have a claim for wrongful termination.

Suspension of employee

Employee suspension is an immediate disciplinary action taken by the competent authority against indiscipline employee that would stop stop him / her from attending job for a certain period mostly with half salary or no pay sometimes in case of serious indiscipline. Suspension of employee is done by the competent authority in case of any misconduct or misbehaviour, dereliction of duties, indiscipline, disobedience, negligence and carelessness in performing duties. In a serious case such as gross misconduct, consideration must be given to a brief period of suspension from work (normally with half salary ) while a full investigation is done. If employee found guilty, the competent authority shall hold increment of salary.

A short period of suspension of employee may be helpful or necessary, but it should only be imposed after careful consideration and after an initial investigation and should be kept under review. Suspension should be for no longer than reasonably necessary according to the circumstances. There is no legal restriction on the length of a suspension, however the Honourable Supreme Court suspension must necessarily be for a very short duration. If the any serious offense  warrant suspending the employee, it may well be that this constitute gross misconduct and should therefore attract dismissal.


Suspension Must Necessarily Be For A Short Duration: SC Upholds Revocation Of 6-Yr Long Suspension Of IPS Officer.


IN THE SUPREME COURT OF INDIA
CIVIL APPELLATE JURISDICTION
Civil Appeal No.8427-8428 of 2018

(Arising out of S.L.P. (Civil) No.12112-12113 of 2017)

(State of Tamil Nadu vs. Pramod Kumar IPS).

Judgement   View



‘This Court in Ajay Kumar Choudhary v. Union of India, (2015) 7 SCC 291 has frowned upon the practice of protracted suspension and held that suspension must necessarily be for a short duration.

Reiterating that suspension must necessarily be for a short duration, the Supreme Court has upheld a Madras High Court judgment that had quashed the disciplinary proceedings against an Inspector General of Police in Tamil Nadu and revoked the  suspension.

On the question of suspension continuing for six years, the bench observed: “There cannot he any dispute regarding the power or jurisdiction of the State Government for continuing the first Respondent under suspension pending criminal trial. There is no doubt that the allegations made against the first Respondent are serious in nature. However, the point is whether the continued suspension of the first Respondent for a prolonged period is justified. ”


Retrenchment (permanent removal of employee)

Retrenchment, like lay-off, also results in separation of the employee from the organisation. Retrenchment means a permanent termination of the services of an employee for economic reasons in a going concern. An employee to be retrenched is required to be given three months notice before his retrenchment or in lieu of the notice he must be paid his remuneration for the period of the notice. The retrenched employee is entitled to get gratuity payment from his employer. For retrenchment of the employee, notice is required to be given to the appropriate government authority and permission for retrenchment must be obtained from the authority. The principle of 'last come, first go* is followed for deciding which employee should be retrenched.
Indian employees inadequately prepared for retirement: Survey


Millennials in India are inadequately prepared for their post-retirement life as retirees are facing challenges in form of rising consumerism, higher medical and education expenses, as also weakening joint family system, says a survey.

According to the Willis Towers Watson Global Benefits Attitudes Survey, employees are facing the issue despite the fact that Indians save more than their counterparts in the western world.

Increasing consumerism, spiralling medical and education expenses, inflationary pressures and a weakening joint family system are some key reasons for this concern, the report said adding that "if not acted upon soon, in the next decade or two, India might be faced with the critical challenge of retirees having inadequate income".

Moreover, research indicates the proportion of workers who are beneficiaries of a formal retirement savings plan (via either the state or an employer) is relatively low. Most workers have to provide the majority of their income in retirement from their own wealth.It is high time that employers seize the opportunity to educate and prepare employees for retirement.

Else, a decade or two down the line, the country could be facing a distressing scenario of retirees having inadequate income over a retirement period potentially longer than their earning lifetime.

Recent  studies have indicated that the three foremost motivations for saving are buying a house, saving towards children's education and/or wedding and provision for an income in old age.

"Lack of awareness, unrealistic assessment of what to expect on retirement and a short-sighted approach to retiral savings are potential causes of this concern,

Patel added that employers should use retirement planning tools to understand the effect of their retirement plans on the overall savings for employees and must play a key role in educating them.

By PTI | Feb 18, 2016, 05.55 PM IST


 
The primary reason organization engage in downsizing is to promote future, competitiveness. According to surveys, they do this by meeting five
 
Objectives :
 
1. Reducing costs. Labour is a large part of a company's total costs, so downsizing is an attractive place to start cutting costs. 
 
Facts [+] 
Aug-2015: Renault Nissan,India- Since struggling to increase in sales after market recovery, the company has decided to go for optimisation strategy by retrenching 1200 jobs from its workforce. Overall plant has 8000 employees with a plant capacity of 400000.

June 2014: Foxconn India announced layoffs/retrenchment to its employees due to continuous fall in business and fall in production since it is major supplier to Nokia India, which has been struggling to stand in its competitive market, subsequently it has started cutdown  in its production and its employees.

4/12/2012, London: British Airways
division planned to cut 400 cabin crew for the purpose of minimising cost due to slowdown in the economy. unlike other organisations, British airways opted for voluntary scheme to retrench its employees.
source:TOI

year 2012:The Indian telecom company Aircel, which has about 66 million customers and a pan-India 2G presence,  scale down operations in Madhya Pradesh, Punjab, Haryana, Rajasthan and Gujarat in its bid to cut costs and reallocate resources to profitable zones. The company has about 800 employees and 6 million customers in these five circles.

TOKYO, 2012: Sony's cellphone division planned to cut  nearly 1,000 jobs of its global workforce, mostly in Sweden by the next two fiscal years through March 2014.  Sony Mobile Communications said  the job cuts are an effort to reduce costs and boost profits. The Japanese electronics and entertainment company posted record losses for the fiscal year ended March-2012, battered by competition from Samsung Electronics Co and Apple Inc.

Zurich, Nov, 2012: SWISS airlines belongs to Lufthansa Germany airlines decided to cut almost 100 jobs in human resource, financial, sales departments as a cost cutting measure due increase in fuel cost and sluggish growth in market. 
 
2. Replacing labour with technology. Closing outdated factories, automating, or introducing other technological changes reduces the need for labour. Often, the labour savings outweighs the cost of the new technology. 

Dec,2012: The United States based Citigroup bank planned to cut jobs, which can be replaced by way of automation as a measure for minimising expenses due to financial crisis and slowdown in the economy.
 
3. Mergers and acquisitions. When organizations combine, they often need less bureaucratic overhead, so they lay off managers and some professional staff members. After software maker Oracle Corporation acquired PeopleSoft, it laid off about 5,000 employees, almost one out of ten. It kept most of PeopleSoft's technical employees so that the company could continue meeting plans for product development and support, meaning the vulnerable positions were those involving administrative functions.

4. Drop in demand: when there is a situation of a drop in demand for goods or commodities produced by concerned organisation, to save cost of employees will be retrenched. TATA Steel in United Kingdom cut nearly 900 jobs due to drop in demand for steel in European market.
 
Facts [+] 

May 2012 Google Inc  acquired (buyout) Motorola Mobility for $12.5 billion, following this in August 2012 Google Inc cut 4000 jobs in the United States due to drop in its profits due to drop in sales and announced severance package costs about $275 million for the retrenched employees . Google stated that his decision was taken to minimise its costs and make business profitable in future. 
 
5. Moving to more economical locations. In recent years, British Columbia has been attractive to U.S. film and television production companies. Other moves, however, have shifted Canadian jobs to other countries. Celestica Inc. announced that it would close an electronics factory employing 700 people in the Montreal area. Celestica has been shifting operations from North America and Western Europe to low-cost Asian countries. 
 
Facts [+] 
Unilever to cut 500 jobs in Britain
 

LONDON: The Anglo-Dutch food and cosmetics giant Unilever planned to cut 500 jobs in Britain as part of a restructuring programme. The retrenchment would occur by the end of 2013, added the company whose brands include Lipton tea, Persil washing powder and Signal toothpaste. Unilever company has operations in more than 100 countries, employing over 171,000 employees.
 
NEW YORK: Global food and beverages giant PepsiCo will cut 8,700 jobs across 30 countries as part of a programme to save up to USD 1.5 billion by 2014 to offset high commodity costs and increased spending on advertising and marketing.
 
Citigroup let go of 100 employees across India in January 2012 month, many functional heads received an unusual brief.
 
Finnish-German telecom equipment maker Nokia Siemens Networks, which had 74,000 employees worldwide, announced plans to reduce its global workforce by approximately 17,000 by the end of 2013, adding that its restructuring plan was aimed at cutting annual costs by one billion euros ($1.3 billion) compared to 2011 outlays. [2,900 job cuts in Germany and 1,200 in Finland.
 
 
More than 1000 to lose jobs in Finland as Nokia shifts base to Asia
Apr, 2012,: Squeezed by fierce competition from Apple Inc.'s iPhone, Samsung Electronics and cheaper brands running Google Inc.'s popular Android software, Nokia has been forced to slash costs, primarily affecting its operations in Europe. Nokia has already closed plants in Germany, Hungary and Romania; and now it's the turn of the Finnish assembly plant. Some 1,000 of the 3,500 jobs in Salo (Town in southern Finland) - which until recently was Nokia's flagship assembly hub - are being cut this year.
 
Feb, 2012, BOCA RATON: Procter & Gamble Co plans to cut a total of 5,700 non-manufacturing jobs as part of a new plan to reduce costs by $10 billion by the end of fiscal 2016, Chief Executive Officer Bob McDonald said. 

 
Layoff of employee
 
This is the separation of an employee initiated by the employer due to business reverses, the introduction of labor-saving devices, or the reduction in the demand for particular skills. Management, as temporary measures during periods of business recession, industrial depression, or seasonal fluctuation, resorts to layoff or downsizing. Most managers say that downsizing is their toughest decision. To help employees who have lost their jobs, employees can provide services such as outplacement or helping employees find a new job, relocation assistance, and family counseling.

 
Companies can justify layoff decisions by such evidence as lagging sales, growing inventory, or a depressed economy. Employers should also provide evidence that they considered all other options, such as transferring employees into vacant positions, placing them in newly created part-time positions, or allowing them to work a shorter workweek. 
 
Textile sector: 45 lakh persons become jobless in last 2 years
INDIA: About 45 lakh people in the textile sector have lost jobs in the last two years mainly due to global economic slowdown and problems at domestic front, apparel exporters body Apparel Export Promotion Council said.
 
The recent trend toward downsizing leading to massive layoffs has been triggered by three factors:

Decline or crisis in the firm - There is a decrease in the demand for the firms' products or services due to a recession in business climate and increased international competition.
  • Technological advances enabling many companies to produce more with fewer people
  • Organizational restructuring - modification of the firm's structure to become less hierarchical by cutting out the layer of middle management.        More Detailed >>
     
The following are some of the alternatives to layoffs: 
  1. Freeze hiring
  2. Restrict overtime
  3. Re-train/Re-deploy
  4. Switch to job sharing
  5. Use unpaid vacations
  6. Use a shorter workweek
  7. Use pay reductions
  8. Use sabbaticals
  9. Implement early retirement programs
IT companies which have announced job cuts in 2012.

In May, Hewlett Packard (HP) announced it will lay-off 27,000 employees across the globe. This included 9,000 job cuts in the USA, while CEO Meg Whitman assured that this move would not affect employees in India.
  • Sony in April said it will shed 10,000 employees as part of its 'One Sony' initiative. This means that the company will lose 6% of its global staff in a bid to once again become profitable.
  • As part of its restructuring programme, BlackBerry maker Research in Motion (RIM) would slash 5,000 jobs. In August, reports quoting insiders came that the company would fire another 3,000 staffers.
  • The embattled Japanese manufacturer Sharp in August announced it would cut 5,000 jobs as part of its cost cutting efforts. Later, sources said that the company would sell two plants and, thus, slash 3,000 jobs, while news reports said Sharp may eventually shed 10,000 jobs.
  • Nokia Siemens' restructuring programme includes 2,900 job cuts in Germany in March, while 630 jobs were slashed in Finland. The company shed 3,500 jobs in Latin America as it exited a service and maintenance deal with Brazil's Oi.
  • Alcatel-Lucent decided to let go off 5,000 employees in order to lower its spending and produce more profit. All divisions except research and development would be affected by this move, which would be completed by 2013-end.
  • Under Google, Motorola Mobility cut 4,000 jobs across the globe. This move, announced in August, translates into 20% employees of the company being laid off as part of the restructuring process. The company would also shut down approximately 30 offices across the world and 'shrink operations' in India.
  • In July, Cisco announced that it would lay off 1,300 people from its workforce, which amounts to 2% of its total staff. The technology giant was compelled to take this step as its sales reduced under intense competition and limping economic conditions.
  • In February, Alliance@IBM, an organisation by IBM employees, released data that IBM laid-off 1,202 employees in various business units throughout the world. It reported the data based on the severance documents it received from the staffers who were let go by the company.
 
Retirements of employee

Retirements occur when employees reach the end of their careers. The age for an employee's superannuation differs. In some States it is 58 years and in Central Government it is 60. There is a thinking to raise the limit to 60 and 62 respectively as there is shortage of skilled people to fill up the vacant jobs.
 
Retirement differs from quits. When the employee superannuates and leaves the organization, he or she carries several benefits with himself or herself. Such a privilege is denied to the employee who quits. Second, retirement occurs at the end of an employee's career but the quit can take place at any time. Third, superannuation shall not leave any soured relationship behind the retiree but a quit is likely to result in hurt feelings with the employer. 
 
Facts [+] 
A recent AARP national survey of 1,500 workers age 45 to 74 showed that nearly 70% plan to work in some capacity during their retirement years. Companies can leverage this tremendous source of experienced human capital. Mature, older workers can be positioned as mentors or assigned to cross-generational teams so that workers of all ages can learn from and appreciate each other.
 

Faced with the expected wave of retiring baby boom employees, organizations are looking to entice retirees and seniors back into their organizations as employees or as consultants. Several new websites have emerged to address these organizational needs. The websites are: yourencore.com, seniors4hire.org, enrge.us and seniorjobbank.com.
 

Retirement in specific countries
 
Country Early retirement age Normal retirement age Employed, 55–59 Employed, 60–64 Employed, 65–69 Employed, 70+
Austria 60 (57) 65 (60) 39% 7% 1% 0%
Belgium 60 65 45% 12% 1% 0%
Cambodia 50 55 ? ? ? ?
Denmark none 65 77% 35% 9% 1%
France 62* 65* 51% 12% 1% 0%
Germany 65 67 64% 23% 3% 0%
Greece 57 65 51% 31% 8% 1%
Italy 57 65 (60) 34% 12% 1% 0%
Netherlands 60 65 53% 22% 3% 0%
Norway 62 67 ? ? ? ?
Spain 60** 65** 46% 22% 0% 0%
Sweden 61 65 78% 58% 5% 1%
Switzerland 63 (61), [58] 65 (64) 77% 46% 7% 2%
Thailand 50 60 ? ? ? ?
United Kingdom none 65 69% 40% 10% 2%
United States 62 67 66% 43% 20% 5%


The retirement age in Russia -- 55 for women and 60 for men -- is among the lowest in the world.

While state pensions are very low, with the demographic decline the system still represents a growing burden for the federal budget.

While liberals like Kudrin advocate a gradual increase in the retirement age to 63, tampering with this Soviet-era social benefit may prove unpopular in a country where retirees often have trouble making ends meet with their meager pensions.

Germany stands first in quiet low unemployment and it is still trying towards full employment next followed by  France stands second in world countries . Due to the low unemployment, companies in these countries are facing hard situation in finding experienced and talented employees to attract in to their companies.  Hence, the companies are planning to raise the payment of incentives to their employees with  postponement of retirement age to retain the employees and also induce women workforce to maintain the required level of workforce.


80 is the new 65 when it comes to retirement
CHICAGO  - When it comes to retirement, many middle class Americans said 80 is the new 65 and plan to delay retirement because of worries over money, according to a new survey.
 
Three-fourths of those surveyed said they expect to work in their retirement years. One quarter said they will "need to work until at least age 80" to live comfortably in retirement.
 
Of Americans who will work in retirement, "47% said that they are going to continue in the same job or a similar job of similar responsibility," Joe Ready, Well Fargo's director of institutional retirement and trust, told Reuters Insider.
 
"That raises a lot of social and economic implications. Will they have the physical ability to work, the mental capacity? What does that mean for the younger work force in terms of coming through and looking to get ahead?"
 
Three-fourths of Americans said it is more important to have a specific amount saved before retirement, regardless of age, while only 20% said it is more important to retire at a specific age regardless of savings.
 
"For several years now, we've seen that Americans are undersaving for retirement and a majority do not trust the stock market as a place to invest for retirement," Ready said.
 
"We did find a bright spot among middle class Americans — more than three-quarters do not want to retire with mortgage debt. This is an important goal, particularly for younger Americans," said Laurie Nordquist, director of Wells Fargo institutional retirement and trust.
 
Eighty-six percent of respondents said it's important to own their home debt-free by retirement.


Severance packages (Compensation that an employer gives to someone who is about to lose his or her job.)are most typically offered for employees who are laid off or retire. Severance pay was instituted to help protect the newly unemployed. Sometimes, they may be offered for people who resign, regardless of the circumstances; or are fired.    More >>

There is no legal requirement in the U.S. to provide severance pay to terminated employees. Many employers routinely give severance packages to employees in order to bridge the gap between one job and the next and to hedge themselves against lawsuits. On average, severance-paying organizations provide terminated employees between one and two weeks pay for each year of service.
Severance contracts often stipulate that the employee will not sue the employer for wrongful dismissal or attempt to collect on unemployment benefits, and that if the employee does so, then they must return the severance money.  More >>



Bankruptcy or Liquidation of Company

 
12,000 employees of bankrupt Alok Industries, lose jobs

Alok Industries liquidation effects about 12,000 permanent employees of the company  to lose jobs in what could be the biggest labour casualty since the implementation of the bankruptcy code.
These employees earned an average salary of Rs 1.45 lakh a year, show data compiled by Corporate Professionals that used the financials reported by the company for 2016-17. Alok Industries was subsequently referred for insolvency proceedings.
There were 11,759 full-time employees as on March 31, 2017, while total staff strength was 18,000. Staff costs amounted to Rs 283.31crore during that financial year.

Hundreds of small vendors and service providers to the company would also be affected. About 2.05 lakh equity shareholders, including public financial institutions and retail investors, are also staring at losses with the company heading into liquidation.
Alok Industries is one of the few companies where the resolution professional called for a resolution plan multiple times after the borrower was admitted for bankruptcy proceedings.

There are 81 companies that have already gone into liquidation under the Insolvency and Bankruptcy Code. More than 100 other companies facing insolvency processes are on the verge of liquidation, according to Corporate Professionals.
 
ET Bureau
Updated: Apr 20, 2018,