Do I have any protection being a company director from termination

622 votes

No. Your association with the company is contractual and therefore, same shall be governed by the contract. Your rights as shareholder, in the absence of any stipulation regarding shares, shall continue as any other shareholder.

Advocate Avneesh Garg LawRato

887 votes

A detailed answer pertaining to your situation can only be given after going through the employment/service contract which you have with your current organization. As a lot of thing is dependent on the terms of the contract, however there are few things which can be answered after reading the above question.

“If the company decides to terminate my contract without reason” they can’t do so.

This is a fundamental violation of the norms of the employment/service sector. No action/inaction in the employment/service sector is without any cause. One has to explain as to why and how that action/inaction was necessitated in the prevailing circumstances. So, if one fine day your company decides to oust you out of the company they have to have a proper reason for the same and that has to be detailed out to you before asking you to leave immediately or after a while.

Do I have any protection being a Company Director or minority shareholder in the Indian Subsidiary? Yes you do.

In fact every employer has his/her right to know the reason behind his/her ousting from the organization. None compliance to this will give him/her power to sue the organization before the Hon’ble Court of India. The post of a Company Director is a crucial post and an upheaval at such post is most likely to bring shameful situation to the organization at first and then to anyone else. Your further rights and protection can be explained to you after going through the contract which you have with your organization.

As far as being a minority shareholder is concerned rights arising out of those shares can only be determined if one has access to your contracts and its nitty-gritty. It might be possible that those shares which have been allotted to you are “sweat equity shares”.

Am I able to demand a severance package even though it is not explicitly mentioned in the contract?

A severance package is pay and benefits an employee receives when he/she leaves employment at a company. In addition to the employee's remaining regular pay, it may include some of the following: an additional payment based on months of service, payment for unused vacation time or sick leave etc.

So, going by the definition you are entitled to receive your severance package against unused vacation time, sick leave etc.

Advocate Pulkit Prakash LawRato