JOSHI & ASSOCIATES

Adv. Urja Joshi

B.B.A. LL.B. (Hons.) LL.M.

LEGAL OPINION

To,
Katrina Kapoor,
General Manager,
Xyz Pvt. Ltd.
Real Tech Park,
6th Floor, Office No. 56-57
Bengaluru 560708

Ref: As per the meeting dated 10th March 2022

Sub: Legal opinion in respected to Employee Termination during
Covid-19

Dear Ma’am,

As per your instructions, I have perused the relevant documents provided

and accordingly prepared a legal opinion in relation to the above-mentioned
subject matter discussing the legal consequences of termination of
employees because of the Covid-19 pandemic.

As per the documents provided, In my understanding Xyz Pvt. Ltd. is a

Bengaluru based mobility start-up founded in 2016 which is one of the
largest ride-sharing platform in South India. As per the records shared by
your office, you had a work force of 4000+ employees including the office
staffs and drivers.

According to the financial year of 2019, your company’s revenue has been
remarkable and your employees have received bonuses and other allied
incentives for their efforts. However, in since February 2020, the company
started making huge losses because of the pandemic of Covid-19 and the
 JOSHI & ASSOCIATES
Adv. Urja Joshi
B.B.A. LL.B. (Hons.) LL.M.

lockdown which was imposed by the government. As a result, the company

has not been able to keep up with its financial obligations towards its
employees. Therefore, I can understand the decision to downsize the
workforce and understand the legal consequences before implementing it.

I, along with my team went through the employee agreements, company

rule book along with other necessary data to come to a conclusive legal
opinion.

As per the legal precedents and my observation the courts usually take a
pro-worker stance considering that India is a welfare state and that the
pandemic has devastated lives of the citenzry.

The company needs to bear in mind that during the current pandemic, the
government has put out particular guidelines which mandate that wrongful
and excessive firing is not permissible.

Here it is important to note that in no case can the notice period in an

employment contract be lower than that which is statutorily provided.
However, if the contract stipulates a longer notice period and corresponding
wages to be paid in lieu thereof, then it takes precedence over the statutory
provisions.

As you terminate employees, be sure to observe a few important

Compliance regulations:

 Consult and cross check your company’s HR policies

 Refer to the employee agreement- The employee agreement will
contain provisions relating to the notice period, severance pay,
compensation and so on that must be offered to the employee upon
termination.
 Settle the severance pay.
 JOSHI & ASSOCIATES
Adv. Urja Joshi
B.B.A. LL.B. (Hons.) LL.M.

It’s imperative that the company does not make decisions based on the
following characteristics as it would call for further conflicts :

 Age of the employer

 Disability
 Religion
 Sexual Orientation

While laying off kindly consider the following requirements :

 Vaccination Status
 Productivity or output during the pandemic
 Working pattern

Apart from the above general compliances, I suggest that the company to
look into the following statutory compliances.

In this regard if the employer is looking at implementing pay-cuts the same

should be applied universally, without any discrimination and specially not
in form of a punishment to any specific employee.

The Industrial Disputes Act, 1947 of which 25F and also Karnataka Shops

and Establishments Act, 1962 specifically mentions about the termination
of employees who have completed at-least 240 days in the company i.e., to
give a prior one-month notice, pay retrenchment compensation, and give a
notice to labour authorities.

Further, keeping in mind the current situation and welfare of the employees,
Ministry of Home Affairs (“MHA”) vide its order dated March 29, 2020
mandated every employer to pay full salaries to its employees and any pay
cut would amount to an offence under the Disaster Management Act, 2005.
 JOSHI & ASSOCIATES
Adv. Urja Joshi
B.B.A. LL.B. (Hons.) LL.M.

However, vide the recent order dated May 17, 2019, MHA has made its
previous orders ineffective, including the order of March 29, 2020, this
would mean that the employers can now make alterations in the payment of
wages of their workers without any government restriction.

Employers (in India) are obligated to pay compensation to employees who

are injured (which includes partial or permanent disablement) or die due to
accidents arising out of or in the course of employment. Accordingly, if it
can be demonstrated that COVID-19 infection was contracted in the course
of employment and it arose out of employment, the employer shall be
legally obligated to pay compensation to impacted employees.

The obligation to pay compensation would also depends on other factors

like the State of employment, the nature of the employee’s work, and the
circumstances in which the injury/death/infection was caused. Accordingly,
each case has to be evaluated based on the facts of each case.

In case you find difficulty in comprehending any part of this document,

kindly consult us in order to maintain best practices and to safeguard
yourself against risk.

Kind Regards,

Urja Joshi,
Junior Associate,
Joshi & Associates.