Industrial Relations And Labour Laws
Labour Law Advocate
Legal Consultancy
Retired Chief - Ir
Anil Akuri
Human Resource
+5 Others

Hi All,
I need your inputs on the legal formalities to be considered for terminating an employee on the basis of non performance.
We are basically a IT Product company based in hyderabad but the office is registered in chandigarh.
In our employment contract for permanent employees we mentioned that for termination of employment (on performance basis) the minimum notice period will be given as per the Indian Labour law but we did not mention how much duration it is..
I happened to join here recently, am not sure what is the minimum duration for termination as per Indian Labour Law.
We followed the process of intimating the employees about his non performance and given enough time for improvement also still we have not seen any improvement then we have no other option except to execute the termination process.
Request you to provide your inputs on what are the laws to be considered in this case.
Thanking you in advance for all your inputs.
13th October 2011 From India, Hyderabad
Law does not compel an employer to keep feeding a non performer. You can send him out. But what is required is to document his performance or rather non performance. For that you have to follow a face to face performance appraisal and app[raise him of the consequences. Still if the employee is not performing, you can terminate his service. If you can give him one month notice or pay in lieu of notice, that would be proper, that he can not say that he was denied justice.
13th October 2011 From India, Kannur
Dear Friend,
As rightly mentioned by Mr.Madhu building the file is more imporatant. If you have already communicated to the employee on various occassions & recorded accordingly then you can initiate action.
To avoid any further implications and in the interest of the employee better to obtain the resignation letter from him and relieve by paying one month notice pay and close because he has to work some where and the termination will have lot of impact on his future hence better explain him properly and complete the process. If he refuses to submit his resignation then terminate.
Regards - kamesh
14th October 2011 From India, Hyderabad
Dear All,
What if in this case we had entered into a service agreement for say 5 years with that employee. Could you please elaborate the effecting clauses of the service agreement also if possible.
Saras Kumar
14th October 2011 From India, Delhi
No bond will say that the employer will be bound to keep a non performer. Always the bond will be in favour of the employer also. Regards, Madhu.T.K
14th October 2011 From India, Kannur
please tell me without any notice compant terminated our permant employed. non performance Base.
20th April 2013 From India, Meerut
If you wish to termination someone on a non-performance basis, then you have to document each and every step of his performance/ non-performance.Give him an opportunity to improve the situation. His non-performance should not be above the level of other employees.
Please check for more information.
20th April 2016 From India, Kolkata
Dear Madhu Sir,
Please explain me the following:
Suppose some workers are engaged through contractor and they complete 2 years of service. Now the company decides to sack the contractor as per the agreement. The contractor does not have any contract in other organisation.
So, my question is that whether in this situation can the employees of the contractor raise an Industrial Dispute under section 2(a) of ID act. As the contractor can not employ them as he does not have any other organisation. Will the contractor be liable to pay the compensation as per section 25F. Moreover, all the workers have lost their job due to non renewal of the agreement.
Please explain parawise.
Dinesh Kumar
20th April 2016 From India, New Delhi
Employees of the contractor are appointed by the contractor only and remains the employee of the contractor. They are only 'deployed' at the business of the principal employer.
The contractor has to pay the statutory dues like ESI, PF etc. However, in case a contractor fails to pay such dues, then automatically the liability shifts on the shoulder of the principal employer.
But in relation to employment, the employees remain the employees of the contractor and disputes can be raised against the contractor only (although principal employer can be made party) under the ID Act.
Check my blog for more information.
21st April 2016 From India, Kolkata
The compensation if any payable under any law, like ID Act, should be paid by the contractor and the disputes of retrenchment arising out of termination of contract by the principal employer should be attended by the contractor only.
23rd April 2016 From India, Kannur
As others have mentioned Contract labourers are employees of the contractor only. Loss of employment due to termination of the contract with the contractor, those employees will have to go against the contractor only.
However, if it is established the supervision and control of these contract workers are by the principal employer and the contract for providing the manpower is only on paper and the contractor just provides the people; it becomes a sham contract and these employees will be deemed to be employees of principal employer and all consequential legal provisions will apply.
B G Ramesh, Hosur.
23rd April 2016 From India, Vellore
Yes it is true that in case of sham contract the situation will be different. But there seems to be a genuine contract in the areas like functioning of canteen. Madhu.T.K
23rd April 2016 From India, Kannur
Hi all.
I was appointed for the period of one year in a German company as a trainee engineer. Upto completion of one month I was not confirmed about my position. As there two posts for trainees 1)sales coordination 2)sales executive.
after one month I was tested by my manager about my work. But as I was unaware of my exact position, I failed to answer him properly. There after I started concentrating on my real position. As on completion of second month, I received a call that I have been removed as my performance was poor, I was shocked, because they haven't tested me again. and the main thing was no proper training was provided particularly. I want to know is this legal to remove someone.
10th August 2016 From India, Pune
Under the provisions of labour law, an employee can be removed for poor performance when such poor performance is proved through a domestic enquiry.
In your case, no such equiry was held and you were terminated directly which makes the entire process invalid. However, since you have completed 1-2 months in the service, there won't be much monetary benefit comparing to the time, legal expenses you have to pay if you decide to go legal.
11th August 2016 From India, Kolkata
Normally there will be a probation period and that could be 6 months. If you were on probation, you can be removed without further detailed enquiry. If the appointment order says that, during probation period your services can be terminated "without assigning any reason", then there is no need to conduct any enquiry but a communication that following the terminal clause of your appointment order you are hereby terminated from service. Explanation is required only if you show the cause of termination. Now, if the appointment order says that during probation period, your services shall be terminated for poor performance, then also no need to conduct any enquiry but a communication that you are terminated for poor performance is okay.

Terminating a confirmed employee will take a different turn because it is after considering various factors including performance that he was confirmed in service and therefore, you cannot find him to be a non performer all of a sudden. performance is measured over a period of time and therefore, every analysis should be communicated to the employee so that he can do better. If this is denied, he is deemed to have denied natural justice. During probation, on the other hand, this is not required.

11th August 2016 From India, Kannur
It is mentioned in appointment letter before.So read properly your appointment letter to follo rules and understand terms and conditions of Company.
11th August 2016 From India, Ludhiana
Dear rithesh can you explain what exactly I have to do if I decided to go legal.? Actually I have nothing in written that I have been terminated from the industry.
12th August 2016 From India, Pune
And there was no clause regarding termination during trainee period.
12th August 2016 From India, Pune
First step towards going legal is by way of sending notice to the company.
12th August 2016 From India, Kolkata
Dear Anil,
Your query regarding non performer. What type of work is he doing ? Is it manual, clerical, technical etc? What are your Service Manual conditions. If the Standing orders Act applies, then if he is in the category of workman doing aforesaid duties, you need to conduct a domestic enquiry first to prove his non performance. We had conducted one such enquiry where, besides non performance the employee of a software firm was very arrogant, so enquiry was conducted and then dismissal letter was given.
20th August 2016 From India, Pune
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