IBC Implication and other factors

Employee as Operational Creditor: Employees are considered operational creditors under IBC. They can initate insolvency proceedings against the company if their dues remain unpaid for more than 21 days after a demand notice.

Filing a claim: Employees can file their claims with the Insolvency Professional (IP) during the corporate insolvency resolution proces (CIRP). Claims include unpaid salaries, wages, and other dues.

Recovery of Dues: Employee' dues are treated as operational debts. In the distribution of proeeds during liquidation, operational creditors (including employees) are paid after secured creditors but before distribution to unsecured creditors in some cases. However, under Section 53 of IBC , employee dues for a certain period are given priority in liquidation.

Intrest and damages: The recovery of interest and damages would depend on the specific provisions of employment contracts or applicable labor laws. IBC priarily focusses on debt recovery, and interest of damages might be part of the claim if supported by contractual or statutory provisions.

Other Legal Remedies: Labour Courts approach for recovery of dues.. Payment of Wages Act. Employees can seek remedies under the payment of wages act, 1936, for delayed or non-payment of wages.

Context of Recent Layoffs:

Given recent layoffs in multiple companies, employees should be aware of their rights under IBC and other labour laws to recovery dues effectively.