Role redundancy : Exit - Am I eligible for any sverance package (excluding my gratuity)?

Hello
I have been serving with IT company for more than 8 years. Two months ago, I got an email from HR saying that my role is redundant and I will get 2 months to search roles in the organization or search outside the organization. After 2 months, I need to resign if I dont get any role within the organization. So far, I have not found any role inside or outside the organization.

Post resignation, I will exit after 2 months.

Am I eligible for any sverance package (excluding my gratuity)? Can you pls advise?

Also, after first 2 months, should I resign in the tool to initiate the exit process or I let employer to do this?

You will get gratuity as you have worked for 8 years, and also the leave surrender benefits. If the employer is terminating you siting the reason as redundancy they they are supposed to pay you severance pay at the rate of 15 days salary for each completed year of service which will come roughly 4 months' salary. But if you have been working as Manager with managerial functions of approving leaves of subordinates, initiating disciplinary action against the subordinates or appraising performance of the subordinates then you will not get any severance or retrenchment compensensation.

Since the HR has given you a mail that the role is redundant the chances of the management terminating you may be remote. This is mainly because termination/ retrenchment involves certain basic principles to be followed which includes sending notice to the labour authorities and selecting the employees to be retrenched from the list of employees in such a way that the last employee joined in a particular role should be the first employee to be retrenched frist. Obviously, an employee who has been with the company for 8 years will not be the last employee who joined in the role. Therefore, there is very remote chance that the employer would initiate your termination, but you may have to put the paper and leave. But for better clarity you can speak to the HR person who had sent you mail that the role is redundant.

Thank you for the response Madhu.
Yes. I have been working as Manager with managerial functions of approving leaves of subordinates and appraising performance of the subordinates.
So that means, I will not get any severance pay....Is that correct? Is there any guideline or policy like that? And what is the logic behind it, pls?

Yes, you are not entitled to get any severance pay. Severance pay or retrenchment compensation as it is described in law is available only to workers who are covered by Industrial Disputes Act. The workman is defined in the Act to exclude those employees having managerial functions. Various courts have also made it clear that persons having managerial powers, not by designations but by functions, are not workman under the ID Act, and as such they will nt get the protection of the said Act. Their conditions of service will be governed by the contract of employment made between them and the employers. Therefore, you can see what is the condition for termination of employment. I believe that it would be two months' notice from either side, and since the employer has already sent you a mail that your position is redundant that communication may be considered as notice from the employer's side. It is true that there may not be any direction that you are being terminated and you will be relieved on the expiry of two months from the date of communication. Naturally, that can be challenged. But you can only challenge it as a violation of contract and in the Civil Court. By taking the employer to Court by you will be inviting unpleasant situations especially when you have enough space in the job market or when your career is not over with this organisation. Therefore, I feel that you need not analyse the service conditions so meticulously, but get ready to be relieved in tow months. If the management has decided to close the post, it is good that you put your papers saying that "as communicated by the HR that the post has become redundant, I do hereby submit my resignation......"

It is also very unfair to ask a manager with 8 years of service to go. Anyway, you will be entitled to gratuity which will be equal to 15 days salary for every completed year of service. The manner in which they treat the term salary may be challenged, because most of the employers consider only the basic pay for calculation of gratuity whereas the total emolument is the amount which should qualify for gratuity. In such scenario, you can go through my write up in the following link which may help you to demand gratuity on total emoluments.

http://madhu-t-k.blogspot.com/2024/04/gratuity-qualifying-salary-some.html

In addition to gratuity, you will also be entitled to leave encashment benefits provided you have balance of earned leave to your credit.

Thank you Madhu very much, that was great insight and detailed.
For information, I have total of 20 years of experience with 12 years from my previous company. Also I work for a captive company and not service based company. Will it make any change to the severance?
Also, the role is closed in my Business Line but I see there are still such roles exist in the other Business Line but within the organization. In some cases, role naming may be changed.
Also there are few employees who had been there in the organization without billability for many months and I am billable as of now also. It seems to me that this could be case to basis and not with generic rules.

For severance related matters your service with previous companies or your service with other companies parallelly will not make any difference. Whether severance pay is to be paid or not is decided with reference to the length of service and the role that you have with your present organisation only.

Whether the role is closed or not is also purely an internal matter. In the case of an employee not having any managerial roles, however, if a role is closed, then no person shall be recruited to that role in future. At the same time, if the work of the same role comes in future, the employer is under an obligation to hire the person who was retrenched before an opportunity could be given to others. But in the case of managers, these protocols will not apply. Therefore, even if the role is recreated, it is not mandatory that you should be given preference over others in hiring.

If there are employees in the bench but whose services are retained, the same can be challenged, but again it will not be maintainable in any courts of law. In a system like government services where you can see a series of service rules, this kind of antagonism could be challenged, but not in private establishments. Again, in a private establishment where certified Standing Orders regulate the different conditions of service you can challenge the act of selective termination. But the Standing Orders also come to the rescue of workers only!

In general it should be seen as biased act of the management.