Paytm layoffs: Employees file complaint with Labour Ministry over 'unfair termination'

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Several Paytm employees have filed a complaint with the Ministry of Labour and Employment against the fintech major, alleging “unlawful termination” without compensation.

Moneycontrol has viewed a copy of the complaint filed on the Ministry’s Samadhan portal, acknowledged by the relevant officer.

According to the complaints dated between June 1-12, the employees have filed for reinstatement of their employment alleging unfair and unethical termination by the Paytm management.

Supporting documents in the form of emails and documents have been also submitted as part of the legal process.

While Moneycontrol could not independently confirm the total number of such individual formal complaints, some employees claim the number to be as high as 50.

“We are awaiting a response from the Ministry and hope the case will be taken up by them. If not satisfactory, will take the court route,” one of the employees who claims to have been terminated without compensation or justification, said.

Following the RBI’s decision to ban Paytm Payments Bank, which powered most of the railroads of the fintech firm, the company has been undertaking a massive restructuring, including employee rationalisation.

In a letter to shareholders on May 22, founder and CEO Vijay Shekhar Sharma had said the firm will focus on its core businesses and improve cost efficiencies to create a leaner organisation, hinting at the likelihood of layoffs in the future.

Sharma said the employee costs of the firm have risen over the years because of their investments in tech and financial services. While investments in merchant sales team and risk and compliance functions will continue, the firm will take steps to cut employee costs, Sharma said, adding that these measures could save up to Rs 400-500 crore annually.

"One97 Communications Limited (OCL) is providing outplacement support to employees which have resigned as a part of the restructuring efforts by the company,” the company had previously said in a statement.

However, scores of employees have alleged being forced to "voluntarily resign" without prior notice, or severance and joining bonuses.

“There is a clause in the offer letter which mentions that in case any dispute arises between the employer and the employee, it has to be resolved via a third-party arbitration committee, and be settled amicably. We cannot take them (Paytm) to the courts directly and will have first settle this via the committee,” another employee said.

A third employee was let go on Friday said, “My HRBP reached out to me yesterday (July 20) saying if I don’t resign by 12pm today (July 21), I will be terminated. I will take up the legal route as soon as possible. A few others are planning to do the same while some are already in the process,” he said.

All India Professionals' Congress (AIPC) extends support

Meanwhile, All India Professionals' Congress (AIPC), a wing of the Indian National Congress focused on working professionals and entrepreneurs, has extended its support to aggrieved Paytm employees.

Newsreports say Paytm has sacked professionals in violation of their contractual obligations.Are you an Ex-Paytm Professional?Were you forced to resign without compensation?All India Professionals' Congress will fight for your cause.Reach out to us: https://t.co/I2UacwS96Z pic.twitter.com/gUFUzHdE2o
AIPC (@ProfCong) June 19, 2024

Calling submissions, AIPC has put out an anonymous form on its social media handles, seeking details from employees who were allegedly forced to resign without compensation, in violation of their contractual obligations.

AIPC said the personal information of the employees will be kept strictly confidential.

The form mandates employees to share their proof of employment such as Offer Letter, Payslip etc., besides the date of their termination.