Gone are the days when job security was a synonym for a renowned/ multinational company (MNC). In the current era, even big names like Twitter, Meta, and Amazon are making headlines for laying off their employees by hundreds and thousands. The journey dates back to days of illegal termination during COVID-19. But that time was somewhat justified since the virus ruined many businesses. Nobody understood how to stand still amidst the blows of lockdowns. The current scenario is somewhat worrisome, especially for the workforce dependent on that one job for survival.
There is one thing to be kept in mind that employers are not Gods. They also need to follow certain rules before they smash their employees with sudden termination of employment. If employees are unaware of what is wrongful termination of employment, they will not be able to speak up when they face it. Given below is a detailed clarification of the termination rules for employees in India, with or without reasons.
People often assume that a private employer can terminate an employee without assigning any reasons for the termination from the job and the employee can only remain helpless. However, regardless of the private or public sector, employees enjoy some basic rights. The Industrial Disputes Act, 1947 terms termination of employment in India as ‘retrenchment’. It is defined as “termination of service of a workman by an employer for any reason whatsoever, otherwise than as a punishment inflicted by way of disciplinary action” under section 2(oo) of the Act. Exceptions include retirement age, voluntary retirement, contractual projects and prolonged illness of the employee. The Indian labour law on employment termination lays some rights and duties of both the parties, i.e. the employer firing from the job and the employees being fired.
Thanks to big companies, lay off has become a household term where there is a question about job security. In legal terms, laying off can be understood as the failure, refusal, or inability of an employer to provide employment to a workman whose name is included in the muster roll. The term muster roll used here under the Industrial Disputes Act, 1947 can be understood as the official list of workers in a factory/ workplace. Hence, a layoff can be understood as the inability of the employer to keep the employee because of a scarcity of raw material, mechanical or other procedural glitch or a natural calamity, etc. which is disturbing the usual work. The inability of the employer leading to employees’ layoff should be justified, in good faith and not a malicious intention. As per the Indian labour law termination of employment rules, subject to certain conditions being fulfilled including a minimum of one year of continuous service by the employee, laid off employees have the right to be paid 50% of their basic salary + dearness allowances. In case the situation does not improve and the employee has to be retrenched, the Indian labour law applies and the employee has to be compensated accordingly.
The labour law on termination of employment lays that employment should continue unless there are some reasons to terminate the same. Such termination also needs to be proceeded with by following certain rules and regulations. Given below are the rights entitled to the employees in case of employment termination, which, if not followed, may result in retrenchment being declared null and void, i.e. ineffective as per law.
The law states that if an employee needs to be terminated from a job, he/ she should be given a notice period ranging from 30 to 90 days. If continuation of employment is not feasible due to any reasons, the alternative path is compensation for termination of employment in India. Hence, either the employee works at the organisation serving the notice period or is given the salary equivalent to the notice period as per the employment contract, or the applicable state laws, as the case may be.
If an employee is asked to serve the notice period in pursuance of termination from employment, the communication should clearly specify the date of termination as well as the date of the end of the notice.
Some states or the applicable rules also contain payment of compensation to employees retrenched by the organisation. Such employees need to be duly compensated as per the rules.
If an employee has been working for 5 or more years and is suddenly retrenched, payment of gratuity comes as a right. There are state-wise varied rules of compensation for employees who have served the organisation for years and have been asked to leave. Suppose the number is 7 years, then for each year, the employee salary should be calculated upto 15 days and the sum of 7 years has to be paid at the time of completion as per employee termination policy in India.
The details of employees on the muster roll need to be up-to-date. Hence, the date of termination of employees terminated also needs to be updated and communicated.
If employees of a particular department or designation are retrenched, a notice containing the names of the employees terminated as per seniority needs to be put on the notice board. In some cases, not doing this minor task may lead to retrenchment being declared null/ ineffective by the courts. The order of seniority not only needs to be maintained in this notice but during termination as well. Usually, the recent joinees are more prone to be retrenched as per law, unless there is a reason for the contrary.
In some cases, the rule lays that retrenched employees should be prioritised in case people need to be hired for the same position for which termination was done. If such a terminated employee refuses to take back employment with such organisation due to any reason, other candidates may be considered.
For some organisations (factories, mines and plantation-based workplaces) that employ more than 100 (the number may vary) employees, government approval may also be required based on the applicable state laws.
It is understood that the definition of workmen does not include people in managerial or supervisory roles. Hence, in such cases, whereby Indian labour law - termination of employment does not apply, the employment contract paves the way for the rules to be followed. For such employees, an elaborate employment letter is quite necessary, specifically regarding retrenchment, notice period and compensation. In case the employment contract is pro-employer and anti-employee, the labour lawyers help prove the same before the court to attract requisite compensation to the employees.
An employee can be terminated without giving notice by compensating for the period of notice or without compensation if it is a case of disciplinary action, after following the due process.
People often have this misconception that a private employer can terminate an employee without assigning any reasons for the termination. However, it is against the employee termination policy in India. The reasons need to be stated and the employees should be given the due chance to explain themselves. Even if the specific reason can not be disclosed, employees can not be terminated at the whims and fancies of the employer. A proper notice has to be served or the employee needs to be compensated for the said period.
The procedure to terminate an employee typically involves providing a written notice specifying the reasons for termination, adhering to the agreed-upon notice period, and complying with applicable labour laws, which may include providing severance pay.
The compensation, notice time, severance pay and other terms that must be provided to the employee upon termination are all outlined in the employment agreement. This contract, which is frequently signed at the outset, is a crucial document that is enforceable in court.
Termination rules for employees in India vary based on the type of employment, the terms of the employment contract, and applicable labour laws. For workmen (non-managerial employees), termination is governed by the Industrial Disputes Act, 1947, requiring a valid reason, at least 1 month’s notice, salary for the notice period, severance pay and notice to the Government. Employment contracts should outline termination terms. Industries with 100 or more employees must follow certified standing orders and there are state-specific Shops and Establishments Acts governing termination for commercial establishment employees
Post-termination, employees are entitled to receive various payments. This includes salary for the notice period (served or if the employer does not provide the required notice), along with severance pay for workmen (equivalent to 15 days average pay for every completed year of service if they have worked for at least one year, with any period of service exceeding 6 months being counted as an additional completed year). Employees who have completed five years of continuous service are entitled to gratuity under the Payment of Gratuity Act, 1972. Additionally, any unpaid wages, bonuses, and benefits up to the date of termination must be paid to the employee.
Dear Client, APP APNE PAS RAKHA HUA SAB KAGAJ, DASTABEJ, PAY SLIPS, BANK STATEMENT AUR AGAR APPOINTMENT LETTER HAI TO USKI COPY LEKE STATE LABOUR DEPTT. OR LABOUR COMMISSIONER POUCHE AUR EK COMPLAINT DARJ KIJIYE COMPANY KE BIPAKSH. APKA JO VI SIKAYAT HAI OH ADHIKARIK KO BATAYEY. APP APNI SIKAYAT PATRA LABOUR COURT ME DAKHIL KAR SEKTE HAI. KOI ACHHA OKIL JO LABOUR COURT ME PRACTICE KARTE HAI USSE BAT KIJIYE
Dear Sir, If you are aggrieved by such method which is causing loss in your future career then approach the Service Tribunal or High Court to set right the anomalies and thus you will get justice definitely. Rate me Five Star*
Dear Sir, In this regard Advocates may not do anything. You can send representations to the concerned departments and get justice accordingly.
Dear Client, Termination from employment without serving notice may be termed as illegal termination/retrenchment and amount to unfair labour practice on the part of the Employer. A contract of employment putting a clause of termination without notice or, pay in lieu of notice itself makes such a contract void and unenforceable. Without complying with the mandatory provision of Sec.25-N of I D Act, 1947, and Rules 76, and 76-A of ID(Central) Rules, 1957 and in the absence of permission of the Appropriate Authority, no employer can retrench/terminate his employee which amounted to illegal termination and unfair labour practice. Sec.25F or 25N of the I D Act that laid down the compliance of the conditions precedent to retrenchment or termination of an employee or workman who renders more than one year of service in an organization. Sec.2A(1) of the said Act states that where any employer discharges, dismisses, retrenches, or otherwise terminates the services of an individual workman, any dispute or difference between that workman and his employer connected with, or arising out of, such discharge, dismissal, retrenchment or termination shall be deemed to be an industrial dispute notwithstanding that no other workman nor any union of workmen is a party to the dispute and accordingly in view of the said provision of relevant law you can raise an industrial dispute over alleged illegal termination against the employer directly u/s.2A(2) of the Act either before the Central Govt. Industrial Tribunal or before the State Govt. Industrial Tribunal based on the class or sector of organization you belong to and as per sub-sec,3 of Sec.2A industrial dispute shall be made to the Labour Court or Tribunal before the expiry of three years from the date of discharge, dismissal, retrenchment or otherwise termination of service as specified in sub-section (1) of Sec.2A of the Act. So if you are not holding the position of Manager/Supervisor but a workman as defined u/s.2(s) of the Industrial Dispute Act then in the absence of compliance of the above provision of law, after serving a legal notice to the Company, raise an industrial dispute u/s.2A of I D Act directly before the Central Govt. Industrial Tribunal or State Industrial Tribunal depending upon the class of establishment you belong claiming reinstatement in service with back wages. Apart, you can also file an application u/s.33C(2) of the I D Act before the concerned Labour Court claiming dues from your employer In case you need any assistance in the matter of drafting the complaint or raising a dispute under I D Act before the Industrial Tribunal you may contact our legal team with the relevant papers.
Dear Sir, You may lodge a complaint with Labor Commissioner and matter will be settled as follows. ================================================== Section 12 in The Industrial Disputes Act, 1947 12. Duties of conciliation officers.- (1) Where any industrial dispute exists or is apprehended, the conciliation officer may, or where the dispute relates to a public utility service and a notice under section 22 has been given, shall hold conciliation proceedings in the prescribed manner. (2) The conciliation officer shall, for the purpose of bringing about a settlement of the dispute, without delay, investigate the dispute and all matters affecting the merits and the right settlement thereof and may do all such things as he thinks fit for the purpose of inducing the parties to come to a fair and amicable settlement of the dispute. (3) If a settlement of the dispute or of any of the matters in dispute is arrived at in the course of the conciliation proceedings the conciliation officer shall send a report thereof to the appropriate Government 1 or an officer authorised in this behalf by the appropriate Government] together with a memorandum of the settlement signed by the parties to the dispute. (4) If no such settlement is arrived at, the conciliation officer shall, as soon as practicable after the close of the investigation, send to the appropriate Government a full report setting forth the steps taken by him for ascertaining the facts and circumstances relating to the dispute and for bringing about a settlement thereof, together with a full statement of such facts and circumstances, and the reasons on account of which, in his opinion, a settlement could not be arrived at. (5) If, on a consideration of the report referred to in sub- section (4), the appropriate Government is satisfied that there is a case for reference to a Board, 2 Labour Court, Tribunal or National Tribunal,] it may make such reference. Where the appropriate Government does not make such a reference it shall record and communicate to the parties concerned its reasons therefor. (6) A report under this section shall be submitted within fourteen days of the commencement of the conciliation proceedings or within such shorter period as may be fixed by the appropriate Government: 3 Provided that, 4 subject to the approval of the conciliation officer,] the time for the submission of the report may be extended by such period as may be agreed upon in writing by all the parties to the dispute.] For full procedure contact me through Vidhikarya.
