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Rediff News  All News  » Business » Severance pay row: Why Rajiv Bansal may have the upper hand over Infosys

Severance pay row: Why Rajiv Bansal may have the upper hand over Infosys

April 21, 2017 16:40 IST

Former finance head Bansal, who left Infosys in 2015, has gone for arbitration over severance pay

Rajiv Bansal, former finance head at Infosys Technologies, has sought arbitration to get the remaining portion of the severance pay he had been once promised.

The Times of India first reported this development, based on sources.

Personnel and legal experts say in such cases, employees are likely be favoured, as courts and tribunals consider them vulnerable before a large company or organisation.

Bansal has  reportedly hired Indus Law to fight for his dues. Former Supreme Court judge R V Raveendran has been appointed sole arbitrator in the case, while Nishith Desai Associates is Infosys' counsel in the matter.

Of the Rs 17.38 crore agreed between the company and Bansal, Infosys paid him Rs 5 crore; the rest was held back.

Bansal left the company in 2015. The software major drew flak from co-founder N R Narayana Murthy for offering such a large amount of severance package to a senior executive.
Salman Waris, managing partner at TechLegis Advocates and Solicitors, says in such a high-profile case, the chances are higher that Infosys settles this out of court.

“It appears to be a clear case that the employee has an upper hand. But, if the arbitration award goes in favour of the employee, Infosys could also go to the high court, resulting in further delay in resolution.

In similar cases where high-profile employees are involved, companies have mediated and settled, considering the dearth of talent at the senior management level. Payment could be deferred. They would not like to convey a bad image,” he said.

Bansal did not respond to calls or messages seeking a clarification on this development. Sources at Infosys confirmed that both the parties had taken the arbitral tribunal route.

An Infosys spokesperson  said: “The company has already clarified on the severance package for former CFO Rajiv Bansal through a detailed statement. We do not have anything additional to add at this point.”

Kris Lakshmikanth, chairman and managing director of The Head Hunters India, a specialised recruiting agency for the information technology sector, says examples of employees moving to an arbitration tribunal are not new but one with such a large severance package is rare.

“In similar cases across the globe, arbitration awards have gone in favour of employees. Courts in India also have supported employees because of the vulnerability of one individual against a big employee,” he said.

Arbitration is common in India’s corporate history, says V Balakrishnan, another former finance head at Infosys.

“In the case of severance pay, an individual and organisation have a contract and that will have a pre-existing arbitration clause. People want timely resolution to the issue and a court case will take longer.”

Photograph: Reuters

Ayan Pramanik in Bengaluru