Abandon of employement

1. Employee Exits
&
Abandonment of Employment
By
Dr. Rajkumar V P
CHRO, IGPL

3. Statistics on
Exit Trends
• A study by the National Sample Survey Office (NSSO) revealed that the average
duration of employment in the organized sector in India was around 3.5 years. This
suggests that many employees leave their jobs within a relatively short period of time.
• In recent years, there has been an increase in the number of employees quitting
their jobs due to factors such as lack of job satisfaction, lack of growth opportunities,
and work-life balance issues. A survey by the TimesJobs.com in 2020 revealed that
lack of job satisfaction was the top reason for employees quitting their jobs in India,
followed by lack of growth opportunities and work-life balance issues.
• In the private sector, the highest turnover rate is seen in the IT and IT-enabled
services sector, followed by the retail and e-commerce sector. In the public sector, the
highest turnover rate is seen in the banking and financial services sector, followed by
the oil and gas sector.
• Statistics also show that the trend of abandonment of employment is higher among
the younger generation of employees. A study by the staffing firm Randstad India
reported that employees aged between 22 and 35 years are more likely to quit their
jobs than older employees. The study also revealed that around 60% of the total
turnover is due to voluntary resignations among the younger generation of
employees.
• In summary, abandonment of employment is a significant issue in India, with
various studies reporting high rates of employee exits. The trend of employee exits
and abandonment of employment has been on the rise in recent years, with the
highest turnover rate being seen in the IT and ITeS sectors.

4. Exit trends
among
generations
• Exit trends can vary among different generations of the workforce. Each
generation may have different motivations and expectations when it
comes to their jobs and careers, which can affect their likelihood of
quitting. Here are some general information on how exit trends may differ
among different generations of the workforce:
• Baby Boomers (born 1946-1964): This generation is known for their loyalty and
commitment to their jobs. They tend to stay with the same employer for long periods of
time and may be less likely to quit their jobs. However, as they approach retirement age,
they may be more likely to quit in order to retire or pursue other interests.
• Generation X (born 1965-1980): This generation is known for their independence and desire
for work-life balance. They may be more likely to quit their jobs if they feel that their work-
life balance is being compromised or if they feel that their job is not fulfilling.
• Millennials (born 1981-1996): This generation is known for their desire for career growth
and development opportunities. They may be more likely to quit their jobs if they feel that
they are not being given opportunities for advancement or if they feel that their job is not
aligned with their career goals.
• Generation Z (born 1997-2012): This generation is known for their technology savvy and
desire for flexibility in the workplace. They may be more likely to quit their jobs if they feel
that the work environment is not accommodating their use of technology, or if they feel
that their job does not offer the flexibility that they need.
• It's worth noting that these are generalizations and individuals within each
generation may have different motivations and expectations when it comes to
their jobs and careers. Also, the trends may vary depending on the specific
culture, country and the industry.
• In terms of generation, the highest turnover rates were found among Gen X
and Gen Z employees, with rates of 20.8% and 18.9% respectively.

5. Sector-wise trends
• Information Technology (IT) sector: The IT sector is known for its fast-paced work environment and high stress levels. It has high employee
turnover rates, with many employees quitting due to burnout and long working hours.
• Retail sector: The retail sector is known for its high employee turnover rates, with many employees quitting due to poor working
conditions, low wages, and lack of job security.
• Healthcare sector: The healthcare sector has relatively lower employee turnover rates, with many employees staying in their jobs for long
periods of time. However, employees in this sector may quit due to high stress levels, long working hours and lack of work-life balance.
• BFSI (Banking, Financial services and Insurance) sector: The BFSI sector is known for its high employee turnover rates, with many
employees quitting due to lack of growth opportunities, high stress levels, and long working hours.
• Manufacturing sector: The manufacturing sector is known for its high employee turnover rates, with many employees quitting due to poor
working conditions, low wages, and lack of job security.
• The turnover rate in India is much higher than the global average, and it is a concern for the companies and industries.
• The highest rate of turnover was found in IT/ITeS sector (21.6%). The BFSI sector had the lowest turnover rate of 11.4%.
• A study by the Confederation of Indian Industry (CII) and KPMG reported that the average employee turnover rate in India is around 16%,
with the highest turnover rate being seen in the IT and ITeS sectors, at around 20%. The study also revealed that around 40% of the total
turnover is due to voluntary resignations.
• Another study by the staffing firm TeamLease Services reported that the average employee turnover rate in India is around 15-20%, with the
highest turnover rate being seen in the IT and ITeS sectors, at around 30%. The study also revealed that around 50% of the total turnover is
due to voluntary resignations.

6. Demographic
trends
• When it comes to demographic trends on abandonment of
employment in India, there are some key observations.
• Firstly, younger employees tend to have a higher likelihood of quitting
their jobs. This can be attributed to the fact that they are more open to
exploring different career opportunities and are less likely to be tied
down by family responsibilities.
• Secondly, the data suggests that employees with higher levels of
education and qualifications are more likely to quit their jobs as they
have better job prospects and are more likely to find a job that aligns
with their career aspirations.
• Lastly, employees who have been in their current job for a longer
period of time are more likely to quit their jobs as they have had more
time to become dissatisfied with their job and explore other
opportunities.
• Demographic trends on abandonment of employment in India shows
that the IT and IT-enabled services sector, the retail and e-commerce
sector, the banking and financial services sector and oil and gas sector
have a high turnover rate. Younger employees, employees with higher
levels of education and qualifications and employees who have been in
their current job for a longer period of time are more likely to quit their
jobs.

7. Abandonment of Employment

8. Abandonment of
employment
• “Abandonment of Employment," occurs when an employee stops showing up for work without
notice or explanation.
• Abandonment of employment is a serious issue in India, as it can have significant consequences for
both the employer and the employee. This can cause significant problems for employers, like
productivity hindrance, loss of business, short-staffed and/or have to find a replacement quickly.
• In India, abandonment of employment is considered a breach of contract by the employee.
According to the Indian Contract Act, 1872, an employer has the right to terminate an employee's
contract if the employee has abandoned their job without reasonable cause or prior notice. Similarly,
an employee has the right to terminate their contract if the employer has breached their contract.

9. Abandonment
of Employment
• Abandonment of employment is a significant issue in India, with
high rates of employee turnover. According to a report by the Indian
Staffing Federation, the average employee turnover rate in India was
16.8% in 2019, which is higher compared to other countries like the
US and UK.
• The reasons for abandonment of employment in India can vary, but
some of the most common reasons include:
• Lack of job satisfaction: A study by the Aon Hewitt Employee
Engagement Report found that only 33% of employees in India
are engaged in their work.
• Lack of career growth opportunities: Many employees feel that
they are not being provided with enough opportunities for
growth and development within their current organizations.
• Poor working conditions: A lack of proper infrastructure and
facilities, along with inadequate safety measures, can lead to
dissatisfaction among employees and lead to abandonment of
employment.
• High stress levels: Many employees in India are facing high stress
levels due to long working hours and a lack of work-life balance.
• Financial insecurity: Many employees in India are facing financial
insecurity due to the current economic situation in the country.

10. Legal Framework
•In India, the legal framework for abandonment of employment is governed by the Indian Contract Act, 1872. Under this act, an
employee is considered to have abandoned their employment if they fail to report to work for a continuous period of seven days
without any valid reason. However, this period may vary depending on the terms of the employment contract or company policies.
•Section 73 of the Indian Contract Act, 1872, provides for the rights of an employer when an employee has abandoned the
employment. It states that when an employee abandons the employment, the employer is entitled to be compensated for the loss
caused by such abandonment.
•Additionally, under Section 2(b) of the Payment of Wages Act, 1936, it is stated that an employee who absents himself from work
without leave or without sufficient cause for a period of more than eight days in a month shall be deemed to have broken the
contract of service.
•The Industrial Disputes Act, 1947, also provides for the termination of service of an employee who has abandoned the employment.
Under Section 25-F of the Act, an employee can be terminated if the employee has been absent without leave for a period of more
than ten consecutive working days.
•Furthermore, it's important to note that the Indian courts have held that an employee who abandons his employment is not entitled
to any notice pay or compensation. However, an employee who has been terminated due to abandonment of employment is entitled
to receive wages only up to the date of termination.

11. Abandonment period & authorized leave
• An employee is considered to be on authorized leave when they are absent from work due to a valid reason, such as
illness or other extenuating circumstances, and have informed their employer or have taken prior permission from the
employer. This absence would not be considered as abandonment of employment.
• For example, an employee may take a leave of absence for a period of time due to a medical emergency or to take care
of a family member. In this case, the employee would not be considered to have abandoned their employment as long
as they have informed their employer or have taken prior permission from the employer.
• It is also important to note that certain laws such as the Maternity Benefit Act, 1961, provide for certain statutory leaves
for women employees, such as maternity leave. An employee availing such leaves will not be considered to have
abandoned their employment.
• The Industrial Disputes Act, 1947 governs the relationship between employers and employees. According to this act, an
employee who abandons their employment without notice or explanation is considered to have committed misconduct. As
a result, the employer can terminate the employee's contract and may not be required to provide any compensation or
notice.
• However, if the employee can prove that there were valid reasons for abandoning their employment, such as harassment
or discrimination, they may be able to contest the termination of their contract. In such cases, it is up to the courts to
determine whether the employee's actions were justified and if the employer is liable for any damages.

12. Abandonment period & authorized leave
• In order to determine if an employee has abandoned their job, the employer must first establish that the
employee has failed to report to work for a certain period of time without any prior notice or explanation. This
period of time is known as the ‘abandonment period’ and is generally between 7-30 days. Once the abandonment
period has expired, the employer can proceed to terminate the employee's contract.
• However, it is important to note that the employer must also establish that the employee has not been on
authorized leave during this period. If the employee has been on authorized leave, they cannot be considered to
have abandoned their job.
• When an employee has been terminated due to abandonment of employment, they are not entitled to any
benefits or compensation from the employer. Additionally, the employee may also be barred from receiving
unemployment benefits.

13. Remedies for Employers
Termination of Employment: Employers can
terminate the employment of an employee
who has abandoned their job. This can be
done by giving the employee a notice of
termination or by paying them in lieu of
notice.
Recovery of Damages: Employers can also
recover damages from an employee who
has abandoned their job. This can include
any losses suffered by the employer as a
result of the employee's actions, such as the
cost of recruiting and training a
replacement employee.
Withholding of wages: Employers can
withhold the wages of an employee who
has abandoned their job. This can include
any unpaid salary, bonuses, or other
benefits due to the employee.
Legal action: Employers can also take legal
action against employees who have
abandoned their job. This can include filing
a suit for breach of contract, seeking an
injunction to prevent the employee from
working for a competing company, or
seeking damages for losses suffered by the
employer.

14. Remedies for Employers
• Non-compete clause: If the contract of employment has a non-compete
clause, employers can enforce it, which prohibits the employee from working
for a competitor for a certain period of time after leaving the company.
• Retention of company property: Employers can retain any company property,
such as equipment or confidential information, that was in the possession of
the employee at the time of abandonment.
It is important for employers to consult with legal counsel before taking any
action against an employee who has abandoned their job. This will ensure that the
employer's rights are protected and that any actions taken are in compliance with
applicable laws and regulations.
Employers have several remedies available to them when an employee abandons
their job such as termination of employment, recovery of damages, withholding of
wages, legal action, enforcing non-compete clause and retention of company
property. It is important for employers to consult with legal counsel before taking
any action against an employee who has abandoned their job to ensure that the
employer's rights are protected and that any actions taken are in compliance with
applicable laws and regulations.

15. Caution
• Employers have the right to terminate the employment
contract of an employee who has abandoned their job.
However, before taking this step, employers are advised to
conduct an investigation to determine the reasons for the
employee's actions and ensure that they have not been
harassed or discriminated against.
• If an employee's actions are found to be in violation of
the company's policies, the employer can terminate the
contract without notice or compensation. However, if the
employee can prove that they were forced to abandon
their employment due to harassment or discrimination, the
employer may be liable for damages.

16. Remedies for Employees
• Termination of the employer's contract: If the employer has breached the employee's contract, the
employee has the right to terminate their contract.
• Recovery of damages: The employee can also seek recovery of damages from the employer for any
losses they have incurred as a result of the employer's breach of contract.
• Injunction: The employee can also seek an injunction from the court to prevent the employer from
terminating their contract.
• Employees who have been terminated for abandoning their employment have the right to contest the
termination of their contract. They can do so by filing a complaint with the appropriate government agency
or by taking the matter to court.
• If an employee can prove that they were forced to abandon their employment due to harassment or
discrimination, they may be able to claim damages from their employer. They can also claim compensation
for any lost wages or benefits as a result of the termination of their contract.

17. Case studies
and examples
of successful
remedies
sought by
employers
1. In the case of Patel v. Altair Engineering India Pvt. Ltd., the employee had abandoned
their job without giving notice or providing any reason for their departure. The
employer sought and was granted a permanent injunction preventing the employee
from working for a competitor, as well as damages for losses suffered as a result of the
employee's actions.
2. In the case of XYZ Ltd. v. John Doe, the employee had abandoned their job and taken
confidential company information with them. The employer successfully sought a
temporary injunction to prevent the employee from using or disclosing the confidential
information, as well as damages for any losses suffered as a result of the employee's
actions.
3. In the case of ABC Pvt. Ltd. v. Jane Smith, the employee had abandoned their job
without giving notice or providing any reason for their departure. The employer sought
and was granted a court order for the recovery of the three months' salary from the
employee as damages for the losses suffered by the company.
4. In the case of Indian Oil Corporation Ltd v. Rajesh Kumar, the employee had abandoned
his job without any valid reason and without giving notice. The employer successfully
sought an order for recovery of the salary paid during the notice period from the
employee.
5. In the case of Infosys Limited v. Anand, the employee had abandoned his job without
giving notice or providing any reason for his departure. The employer sought an
injunction against the employee from working for a competitor for a period of one year
and also sought recovery of damages for losses suffered as a result of employee's
actions.
6. 6. In the case of XYZ Ltd. v. John Doe, the company sought to terminate the
employment of an employee who had abandoned their job without notice. The
employee had been employed as a sales manager and had failed to show up for work
for several consecutive days without any communication. The company was able to
successfully terminate the employee's employment and recover damages for the losses
suffered as a result of the employee's actions.

18. Case studies
and examples
of successful
remedies
sought by
employers
7. In the case of ABC Inc. v. Jane Smith, the company sought to enforce a non-compete
clause in the contract of employment against a former employee who had abandoned their
job and taken up a position with a competitor. The court found that the employee had
breached the non-compete clause and ordered them to pay damages to the company.
8. In the case of LMN Corp. v. Michael Brown, the company sought to retain company
property in the possession of an employee who had abandoned their job. The employee
had been in possession of a company-owned laptop and phone at the time of their
departure, and the company was able to successfully recover these items.
9. In the case of PQR Ltd. v. Sarah Patel, the company sought to withhold the wages of an
employee who had abandoned their job. The employee had failed to show up for work for
several consecutive days and had not provided any notice or explanation for their absence.
The company was able to successfully withhold the employee's wages for the period of their
absence.
10. In the case of DEF Inc. v. Robert Johnson, the company sought legal action against an
employee who had abandoned their job and taken confidential information with them to a
competitor. The court found that the employee had breached their duty of loyalty to the
company and ordered them to pay damages and return the confidential information.
These case studies demonstrate that employers have a range of remedies available to them
in cases of abandonment of employment, including termination of employment, recovery of
damages, enforcement of non-compete clauses, retention of company property,
withholding of wages, and legal action. However, it is important for employers to consult
with legal counsel and carefully consider the specific circumstances of each case before
taking any action.

19. Case Study Exercise

20. Case Study 1:
• An employee of a large manufacturing company abandoned their job without notice or explanation.
The employer conducted an investigation and found that the employee had not been facing any issues
at work and had not reported any harassment or discrimination. Based on this, the employer
terminated the employee's contract without notice or compensation. The employee then filed a
complaint with the labor court, claiming that they had been forced to leave their job due to
harassment by their supervisor. However, the court found that there was no evidence to support the
employee's claim and that they had abandoned their job without valid reason.
• What would be court’s ruling?!

21. Case Study 2:
• In a recent case in India, an employee working at a software company abandoned their job without
notice or explanation. The employee did not show up for work for several days and did not respond to
any communication from the company. The employer decided to terminate the employee's contract,
citing abandonment as the reason for termination. The employee later claimed that they had been
facing harassment from their manager and had decided to quit as a result.
• The employee filed a complaint with the labor court, alleging that the company had not provided a
safe working environment and that the termination of their contract was unjustified. The court
conducted an investigation and found that the employee had indeed been facing harassment from
their manager.
• What would be the Court’s ruling?!

22. Case Study 3:
• In a recent case in the United States, an employee working at a retail store abandoned their job
without notice or explanation. The employee did not show up for work for several days and did not
respond to any communication from the company. The employer decided to terminate the employee's
contract, citing abandonment as the reason for termination.
• The employee later claimed that they had been facing discrimination from their manager on the
basis of their race and had decided to quit as a result. The employee filed a complaint with the Equal
Employment Opportunity Commission (EEOC), alleging that the company had not provided a safe
working environment and that the termination of their contract was unjustified.
• The EEOC conducted an investigation and found that the employee had not been able to prove that
he faced any discrimination from their manager.
• What would have been the decision in this case?!

23. Case Study 4:
• In a recent case in Canada, an employee working at a manufacturing company abandoned their job
without notice or explanation. The employee did not show up for work for several days and did not
respond to any communication from the company. The employer decided to terminate the employee's
contract, citing abandonment as the reason for termination.
• The employee later claimed that they had been facing harassment from their manager and had
decided to quit as a result. The employee filed a complaint with the Canadian Human Rights
Commission, alleging that the company had not provided a safe working environment and that the
termination of their contract was unjustified.
• The Commission conducted an investigation and found that the employee had indeed been facing
harassment from their manager.
• What would be the order?!

24. Case Study 5:
• In a recent case in the United States, an employee of a retail company abandoned their job without
notice or explanation. The employer conducted an investigation and found that the employee had
not reported any issues at work and had not been facing any harassment or discrimination. Based
on this, the employer terminated the employee's contract without notice or compensation. The
employee then filed a complaint with the Equal Employment Opportunity Commission (EEOC),
claiming that they had been forced to leave their job due to discrimination. However, the EEOC
found that there was no evidence to support the employee's claim and that they had abandoned
their job without valid reason.
• How will you decide this case?!

25. These case studies demonstrate that the laws and remedies for employment
abandonment vary from country to country. In India, the employer is entitled
to terminate the contract without notice or compensation if the employee
abandoned the job without valid reason. In the US, the employer is not
required to provide notice or compensation in most states. In Canada, the
employer may be liable for damages if the employee can prove that they
were forced to abandon their job due to harassment or discrimination.
Employers should conduct an investigation to determine the reasons for the
employee's actions and ensure that they have not been harassed or
discriminated against before taking any action.

26. Best Practices for Employers
Strategies for preventing and dealing with abandonment of employment
• Clear communication: Employers should have clear and open lines of
communication with their employees, and should ensure that they are
aware of the company's expectations with regard to attendance and
notice of absence.
• Employee engagement: Employers should strive to create a positive and
engaging work environment that encourages employee loyalty and
motivation. This can be achieved through regular performance
evaluations, opportunities for career development, and a supportive and
respectful management style.
• Flexible working arrangements: Employers should consider offering
flexible working arrangements, such as remote working or flexible hours,
to accommodate employees' personal and family responsibilities.
• Strong policies and procedures: Employers should have clear and
comprehensive policies and procedures in place that clearly outline the
company's expectations and the consequences of abandonment of
employment.
• Exit interviews: Employers should conduct exit interviews to understand
the reasons for an employee's departure and take steps to address any
underlying issues.
• Employee retention programs: Employers should implement employee
retention programs that focus on employee engagement, job satisfaction,
and career development.

27. Best Practices for Employers
• Employee assistance programs: Employers should provide Employee
assistance programs, like counselling, mental and physical health support
etc for employees to deal with any personal, professional or health related
issues that may be affecting their work performance.
• Legal compliance: Employers should be aware of the legal requirements
with regard to termination of employment and should consult with legal
counsel before taking any action in cases of abandonment of
employment.
• Regular check-ins: Employers should conduct regular check-ins with
employees to ensure they feel valued and supported.
• Training on abandonment of employment: Employers should conduct
training sessions with employees to educate them on the company's
policies and procedures related to abandonment of employment, and the
legal framework surrounding it.
By implementing these strategies, employers can effectively prevent and deal
with abandonment of employment, and take appropriate action when
necessary.

28. Conclusion
• The future outlook on Employee Exits and Abandonment of Employment in India is likely to be influenced by a
number of factors, including changes in the economy, the growth of the gig economy, and evolving attitudes
towards work-life balance.
• In terms of the economy, a downturn or recession could result in increased rates of abandonment of
employment as employees seek more stable job opportunities. On the other hand, a strong economy could
lead to lower rates of abandonment as employees feel more secure in their jobs.
• The growth of the gig economy, where individuals work freelance or short-term contract jobs, may also impact
abandonment of employment rates. The flexibility and autonomy provided by gig work may lead to a decrease
in abandonment rates as individuals have more control over their work arrangements.
• Evolving attitudes towards work-life balance may also play a role in the future outlook on abandonment of
employment. As more people prioritize their mental and physical well-being, they may be more likely to quit a
job that is causing them stress or negatively impacting their health.
• Overall, it is difficult to predict the exact future outlook on abandonment of employment in India. However, it is
important for employers to stay aware of changes in the economy and workforce trends in order to anticipate
and mitigate any potential increases in abandonment rates.