Most employers in Mumbai have given a full salary for March. But Salary from April became a big issue. The maximum private sector are mandatorily cutting a huge percentage of salaries of their staff; some are unable to pay salaries for months. The market has not flourished; the lockdown hit was very heavy. Some employers will not be able to pay and will not pay for the period many months ahead unless everything comes to a normal state. Many companies make their staff work on 50 per cent cut. As companies try to ensure their survival by cutting costs, many have resorted to slashing salaries and lying off staff. Others have put employees on indefinite leave without pay or put freshly hired staff on hold. The impact of Covid-19, as many people are facing a salary cut.
Prime Minister Modi urged companies to be kind to employees. Yet, many corporate have already announced salary cuts, some have asked employees to leave, and others have asked their employees to go on furlough, the term for leave without pay. Aviation, media, hospitality, banking, and financial services have been among the worst-hit sectors. Many companies got closed and the owners are hand to mouth. One of my friends was working for a PR agency, now selling vegetables in his village. One of the best page designers in Jewellery Company selling chapattis and Tiffin’s in her locality, many It sector guys who bought cars on EMI have enrolled themselves for rides like Ola and Uber. Labour laws in India protect the rights of the workmen, who are blue-collar workers operating plants and machinery. But the latest directives by the government do not make any distinction between workmen and white-collar employees, and those hired on contract by companies. HR consultants say companies can stay within the rule by asking employees to go on furloughs, capping salaries, withholding performance-linked to pay, or re-configuring job roles such that employees think they are better off quitting. Also, while the lay-off, companies ask employees to hand in their resignation letters.
Most employees agree, rather than taking their employer to court as it could hurt future job prospects. This ensures that companies cannot be accused of firing people. I don’t think there is a blanket prohibition on changes to any and all terms of employment. As far as terminations and lay-offs go, where a state has passed an order restricting any termination, under duly delegated authority under the National Disaster Management Act, then there could be prosecuted for violating the same. But not all states appear to have done that. At a time when companies are incurring losses because of zero revenues during the lockdown, many employers may genuinely not be in a position to pay full wages on time. So employees would agree to take a lower salary than be out of a job. All industries are suffering in the current post-pandemic situation and the pain is now translating into layoff in every industry at every level.
Companies are even cutting the salaries of those employees whom they are planning to retain. The organised private sector in India is planning to have major job cuts/layoffs and lockdown that have significantly impacted the economic activities. There was an online survey by a private agency, 68 per cent of the employers have either started the layoff process or are planning to even today because they themselves are in crises.
Delayed salary, salary cut up to 70% or more, leave without pay, or at the worst loss of job situations. So be prepared for any of these outcomes even for next year. These are the most difficult times not only for you as an employee but also for your employer.
In most cases business continuity itself is at risk or new ways of doing business will have to be evolved. Most businesses might change into online businesses and many employees might have to start their own small businesses. This also needs to be seen that Corona will be eradicated or the world will have to live with it. Some super-rich established companies somehow cope up with salaries, and they are not harsh on cuts but there are huge layoffs in those companies. This time many companies are facing a lot of problems due to lack of finance due to the closure of their work. And due to which he will not be able to give more than 50 percent of salary to his employee. And there are some companies whose company has good turnover and profit; it can also give a salary to the employee at home for 2 to 3 months. After that, they won’t be able to give. And the small skill industries company also cannot give more than 2 months after that. That is why in such a time we will have to live as much as we have got until the work is not started, he also cannot do anything. Among the surveyed organizations, 73 per cent said they have plans to decrease the salary of employees, 57 per cent said this layoff is temporary, while 21 per cent said they are doing permanent layoffs for at least 2 years. Interestingly, 32 percent of employers did not have any job cut/layoff plans. Employers have the right to cut salaries in a lockdown or any other situation. Employers always have a right to increase compensation as well as reduce it at all times when you are in employment.
One should not look at this emotionally or the fact that the government has issued a recommendatory letter to employers to keep paying salaries. Such letters are merely a request and cannot be legally enforced. Businesses need to generate resources to be able to pay their employees. They do not have unlimited funds. Even the government has started going around with a begging bowl, so what do you expect businesses to do?