A Post on Karnata Act: Severance Pay in case of lay off

Under Section 39 of Karnataka Shops and Commercial Establishments Act (which TCS will come under), it is illegal for an employer to dismiss anyone who has put in 6 months or more of service except for a “reasonable” cause and unless 1 months notice or salary is paid – except for cases of misconduct. Now (and this is the interesting part) if “no reasonable cause” or misconduct can be proven, then employer MUST pay one month’s pay for every year of service. Going by this, if you have been terminated without any reasonable cause or misconduct, then you should get at least 6 months pay! Another clause in this Act is about Right To Appeal. You can approach the Labor dept who is the appellate authority and if this fails, you can approach the District Judge. There are tons of cases where companies are made to pay higher severance packages where they wrongfully pay insufficient severance when they terminate an employee (but of course they have a right to terminate).