Several employees of fintech giant Paytm have lodged a complaint with the Ministry of Labour and Employment, alleging “unlawful termination” without compensation. The complaint, submitted via the Ministry’s Samadhan portal, has been acknowledged by the relevant authorities.
Dated between June 1 and June 12, the complaints demand the reinstatement of employment, citing unfair and unethical termination practices by Paytm’s management. Supporting documents, including emails, have been submitted as part of the legal process. While the exact number of formal complaints is unconfirmed, some employees estimate it 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, we will take the court route,” one terminated employee stated. This follows the Reserve Bank of India’s decision to ban Paytm Payments Bank, leading to significant restructuring and employee rationalization within the company.
In a letter to shareholders on May 22, Paytm founder and CEO Vijay Shekhar Sharma outlined plans to focus on core businesses and improve cost efficiencies. Sharma hinted at potential layoffs, attributing the rise in employee costs to investments in technology and financial services. He noted that while investments in the merchant sales team and risk and compliance functions would continue, steps to reduce employee costs could save the company Rs 400-500 crore annually.
Paytm has stated that One97 Communications Limited (OCL) is providing outplacement support to employees who resigned as part of the restructuring. However, numerous employees have alleged being forced to “voluntarily resign” without prior notice, severance, or joining bonuses.
“There is a clause in the offer letter that any dispute between employer and employee must be resolved via a third-party arbitration committee. We cannot take them (Paytm) to court directly and must first settle this via the committee,” another employee explained.
A third employee, terminated on July 21, stated, “My HRBP reached out to me yesterday saying if I don’t resign by 12 pm today, I will be terminated. I will pursue the legal route as soon as possible. A few others are planning the same while some are already in the process.”
In response, the All India Professionals’ Congress (AIPC), a wing of the Indian National Congress focused on working professionals and entrepreneurs, has extended support to the aggrieved Paytm employees. AIPC has released an anonymous form on its social media handles, seeking details from employees who were allegedly forced to resign without compensation, promising to keep personal information confidential. The form requires proof of employment, such as offer letters and payslips, and the date of termination.
The unfolding situation highlights the growing concerns over employment practices and the need for regulatory oversight to protect workers’ rights amidst corporate restructuring.
