Paytm, the Noida-based fintech giant, is under scrutiny for allegedly forcing employees to resign without proper notice, denying severance pay, and demanding the return of joining and retention bonuses. The labour ministry has issued a notice to Paytm, highlighting these claims and calling for a thorough investigation.
Labour Ministry’s Notice
The notice was sent by the Regional Labour Commissioner in Bengaluru over the weekend, responding to multiple complaints filed by affected employees on the labour ministry’s Samadhan portal. These employees accused Paytm of unfair treatment during their exit process. This comes at a time when Paytm’s parent firm, One97 Communications, is already under pressure due to regulatory non-compliance issues at its banking unit, which led to severe actions by the Reserve Bank of India (RBI) earlier this year.
Employee Allegations
Reports indicate that Paytm has been asking employees to resign voluntarily without prior notice and denying them severance pay. Additionally, the company has allegedly demanded the return of joining and retention bonuses from these employees. These practices have led to widespread dissatisfaction among the workforce and prompted several complaints to the labour ministry.
Paytm’s Response
In response to these allegations, a Paytm spokesperson emphasized the company’s appreciation for its employees’ contributions and dedication. The spokesperson stated that the decision to transition some employees was challenging and made after careful consideration of all options. Paytm claims to have aimed for fairness and transparency throughout the process, providing as much support as possible to those affected. The company also mentioned its commitment to resolving any issues raised by the terminated employees and actively listening to their feedback.
Labour Ministry’s Intervention
The labour ministry has called for representatives from both Paytm’s management and the complainants to present their cases with all relevant documentation. This step is part of the ministry’s efforts to address the concerns raised by the affected employees and ensure that proper procedures are followed. The ministry’s involvement is expected to bring clarity and possibly enforce corrective measures to ensure compliance with labour laws.
Implications for Paytm
The outcome of the labour ministry’s investigation will likely have significant implications for Paytm’s restructuring efforts and its compliance with labour laws. As the company navigates these regulatory and employee-related challenges, it remains under significant scrutiny from both the public and regulatory bodies. Paytm’s approach to handling these allegations will be closely watched and could impact its reputation and operational practices moving forward.
