• My company is pressuring to resign with citing reason of company loss and manpower reduce

I work in a private company for last 4.5 Years and also obtained one promotion with yearly performance increment. The management has increased its manpower cost through hiring massive manpower across vertical and multilayered staff. The hiring process was on boom till january’20205. From February’2025 onwards, the management stated that they are facing huge loss and in the interest of company as well as investors, the company has planned to reduce manpower. 
Accordingly, list was prepared and HODs was asked to reduce 30% cost of the respective vertical. As my reporting officer has recently joined (6 month back) as executive VP and is also close to the managing director has proposed my name and also informally hinted me to start searching for other alternative.
The company is offering options like – employee to given resign and may complete 3-month notice period with work from home; employee to give resign and may get immediate relieving with 3-month salary payouts.
The management is also selective in reducing manpower (protecting all those who are close to the Managing Director and also burden to the company as they are high paid VPs and Executive VP) which is apparently noticed by many staff but not dare to confront or question.

My negotiation points as mentioned below -
As I am close to complete 5 years to get gratuity entitlement, hence above optioned doesn’t suit me else I will lose my gratuity amount which is likely to be around 2.50 lakh. For me, I have to stay for next 2 months and the resign subjected to het alternate job offer so as to complete my notice period by 6th Oct’2025 to get gratuity benefits and also alternate jobs.
Request to suggest , If company force me to resign now, what are the possible points I should have to confront with the company to protect my benefits, securing alternate employment which I yet to convert and future carrier.
Asked 8 months ago in Labour

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8 Answers

1) Inform the company you are willing to resign serve the notice period of 3 months but you should be paid your gratuity amount as you have worked for company for 4 years 240 days 

 

2)An employee is deemed to be in continuous service for one year if an employee during the 12 preceding calendar months has worked under the employer for not less than 190 days or 240 days, as the case may be."

 

3) you have worked for 240 days in the 5 th year hence should be eligible for gratuity 

 

4) it is advisable for an employee to ensure that the service period is 4 years and 8 months to be eligible to receive the gratuity at the time of resignation 

Ajay Sethi
Advocate, Mumbai
99755 Answers
8141 Consultations

You are in a crucial phase of your employment, especially being just two months away from completing five years of continuous service, which would make you eligible for gratuity under the Payment of Gratuity Act, 1972. If the company is forcing you to resign now, you must firmly assert that any resignation or relieving should be aligned in a way that your last working day falls after completing five years, i.e., post 6th October 2025, to ensure your gratuity entitlement is not lost. You can negotiate on the grounds that you have served the company diligently for 4.5 years, received a promotion and yearly increments, and are currently in the process of seeking alternate employment. Politely but firmly convey that you are willing to serve the notice period or work from home until your five-year service is completed, after which you will resign or accept separation. If pressured, you can also point out the discriminatory nature of the layoff process, where high-paid executives close to the management are being protected, while others are being asked to leave arbitrarily. While keeping your tone professional and non-confrontational, you may also suggest that the company offers a deferred relieving date or issues a continuation certificate to reflect full five years of service, ensuring you do not lose out on statutory benefits or future job prospects.

Aman Verma
Advocate, Delhi
501 Answers

- You can send a legal notice to the said company for the payment of the amount of the contract period and also to pay the gratuity for which you entitled to get after completing after 5 years service. 

Mohammed Shahzad
Advocate, Delhi
15796 Answers
242 Consultations

You have stated to have worked in the company for around 4 years and 6 months and to become eligible to get gratuity you may have to work minimum for another two months or more.;

An employee is generally eligible for gratuity in India after completing 4 years and 8 months of continuous service. 

The 240-day rule, where 240 days in a year is considered a full year of service, is relevant for determining gratuity eligibility. 

The employer has not informed you yet to resign or had given an offer to work from home for three months and then quit the job.

There is no decision taken by the management yet hence you may just wait for the developments in the company.

They cannot remove you from the service without any valid reason, if at all they are terminating your service  you can issue a legal notice to reinstate you and failing to respond you can file a suit for the said relief before a civil suit.

If the company is granting three months time then you will automatically become eligible for gratuity payment.

T Kalaiselvan
Advocate, Vellore
89957 Answers
2490 Consultations

Let the company initiate if they want to let you go. If you resign voluntarily, your claim to severance benefits or dispute resolution weakens. If they offer 3-month payout, ensure you get it in writing (email or letter) with Last working day, Severance amount, Gratuity status and Experience letter assurance. 

File complaint with Labour Commissioner or Labour Court under Gratuity Act, if they force you to resign

Siddharth Jain
Advocate, New Delhi
6617 Answers
102 Consultations

  1. Gratuity and Notice Period: Since you are close to completing 5 years, you are entitled to gratuity. The company should not force you to resign before you complete the 5-year tenure. If they do, you can negotiate for severance equal to your gratuity amount. You can argue that resignation should only happen after completing your tenure to ensure the gratuity payment.

  2. Negotiating the Resignation Offer: If the company insists on resignation, negotiate for an extended notice period or severance package that accounts for both the notice period and the gratuity loss. Also, seek work-from-home options or immediate relieving with salary as per their offer.

  3. Job Security and Transition: You can request a written assurance regarding your job transition period and an alternate job offer before you resign. This can safeguard you from career instability during the transition period.

  4. Confronting Selective Action: If you believe there’s unfair selection in layoffs (like protected high-paid VPs), document and raise concerns regarding fairness and transparency. If necessary, you can explore legal recourse for wrongful termination or forced resignation.

  5. Consulting a Lawyer: For better protection of your rights, consult a labour lawyer to draft a letter of negotiation outlining your terms before resigning.

Shubham Goyal
Advocate, Delhi
2054 Answers
14 Consultations

It can do the same but they have to pay the compensation for retrenchment after following the retrenchment rules under the industrial disputes act

Prashant Nayak
Advocate, Mumbai
34494 Answers
248 Consultations

Dear Client,

  1. Negotiate Deferred Resignation/Notice Period: Ask the company to consider allowing continuation up to October 6, 2025, to achieve 5 years for gratuity eligibility, as there is minimal cost impact and considerable personal financial hardship if it is cut short.
  2. Document All Communications & Refrain from Voluntary Resignation Without Terms: Never resign under compulsion; insist on written consent of terms like gratuity, payment of salary, and relieving benefits. In the event of compulsion, seek formal termination to protect legal rights and future job prospects.
  3. Seek Legal or HR Mediation: Make a formal approach to HR with your demand, and if necessary, consult a labor lawyer to pursue rights under the Payment of Gratuity Act and possible wrongful termination/constructive dismissal in case of forced resignation.

Hope this helps you; if you still have any clarifications or issues, do not hesitate to ask.

 

Anik Miu
Advocate, Bangalore
11006 Answers
125 Consultations

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