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What compensation is one legally entitled to when company closes?
10-Oct-2023 (In Corporate Law)
Quite unexpectedly, the company I am working for has announced they are closing (not even 5 months into the business). They haven't provided an official mail regarding this but have informed us that they will only pay us one month salary. It's the festive season and hiring has frozen in most good organizations. Legally can we demand 3 months salary as compensation and how can we ensure we get this?
Dear Client,
Kindly refer to your query posted above. Typically, the Industrial Dispute Act, 1947 stipulates labour friendly remedies to employees in case of retrenchment or closure, however, such broader scope of remedies is applicable depending the number of employees working in such establishment. Further, such remedies are available if an employee has worked not less than one year in the establishment.
You may raise your complaint and grievances before a labour officer.
Best regards,
Kindly refer to your query posted above. Typically, the Industrial Dispute Act, 1947 stipulates labour friendly remedies to employees in case of retrenchment or closure, however, such broader scope of remedies is applicable depending the number of employees working in such establishment. Further, such remedies are available if an employee has worked not less than one year in the establishment.
You may raise your complaint and grievances before a labour officer.
Best regards,
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Adv. Sangeet Sindan
Bangalore | 25+ Answers
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Your employment agreement/ offer letter will determine what compensation you can avail of. You can also check if they are truly closing the business by checking the details on the MCA website. You may also be able to issue a legal notice seeking compensation but it will depend on your employment agreement / offer letter.
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