Hi all,
I would like to understand whether inefficency amounts to misconduct or termination of an inefficent employee can be under retrenchment. I am looking for case law which states that inefficency amounts to misconduct and termination for inefficency is/is not retrenchment. I have not found any specifc regualtion which defines inefficeny as misconduct. Even though, the section for retrenchment under the ID Act states "any reason whatsoever" I have found articles on the internet which state that termination for inefficency is not retrenchment. However, these articles do not provide an supporting case law.
Thanks

From India, Gurgaon
Dear Mb_04,

Why you want to handle employee's "inefficiency" under the provisions of labour laws? By the way, are you student or a professional? What is the context of your query?

When employer issues "Appointment Letter", it is nothing but "performance contract" between employer and employee. The remuneration given to the employee is for delivery of certain results or performance. Other factor for getting salary is observing general discipline of the company.

I have few questions about employee's inefficiency. These are as below:

a) On what grounds you say that employee was inefficient? Have you investigated the causes of inefficiency? Is the employee running short of tools or other job aids? On a scale of 100 where he/she stands?

b) Was the employee given sufficient training to execute the work?

c) By the way, is this recruitment problem? Did you give prominence to "salary bracket" over "skill bracket"? Did you recruit misfit and now taking corrective action?

d) What about the manager of the employee? Did he/she give sufficient support to the under-performing employee? How much time manager spent with this employee?

e) Termination on the grounds of "inefficiency" is loss to the company. Who has measured this loss and on what parameters? Who is accountable to reduce this loss?

There are so many questions gentleman that cannot be swept under labour laws's carpet.

Ok...

Dinesh V Divekar


From India, Bangalore
Hi Dinesh,
Thanks for your response.
I am a professional and need to put in place the termination policy. We have clear regulations viz, termination for misconduct and retrenchment. However, termination for inefficency is ambigious. Please note that before termination for inefficency all due process is investgated, i.e. the underlying cause of the inefficency.. be it the company or the employee lack of training, skill set etc.My interest is in understanding whether inefficency amounts to misconduct or it does not. If it does not can it be treated as rethrenchment. Any landmark case law which states that inefficency is/is not retrenchment. Would appreciate a response on the exact issue.

From India, Gurgaon
Termination for inefficiency would be invalid.Inefficiency is not misconduct but deliberate go slow is misconduct,and can be taken cognizance of
and if found necessary,disciplinary proceedings can be initiated.
However at the time of retrenchment,the rule of first come last go can be deviated and inefficient persons even though senior can be retrenched.

From India, Pune
Dear mb_04,
Under-performance is not a misconduct. However, if things come to termination then it is better to follow the principles of natural justice i.e. conduct the domestic enquiry and then terminate the employee. I say so because later if employee were to file suit, records of domestic enquiry come handy in litigation.
Under-performance of employee is completely different from retrenchment and it cannot be handled under the provisions of retrenchment clauses of ID Act, 1947.
I recommend you making comprehensive policy on employee separation. It could cover separation due to several reasons i.e. normal separation, separation on disciplinary grounds or separation on under-performance. For latter two cases, spell out clearly how progressive discipline will be handled.
Ok...
Dinesh V Divekar

From India, Bangalore
Hi Dinesh,
Thanks for your response. It certainly helps. I have case law which states that inefficency is not misconduct. However, a deliberate go slow may be treated as misconduct. Are you aware of any case law which states that termination for inefficency is not retrenchment.

From India, Gurgaon
I totally agree and support Mr. Dinesh Divekar's view.

In fact, I had expected more from him in calling a 'spade' a 'spade'.

The very idea of linking the term "inefficiency" with "retrenchment" seems mischievous and with questionable motives esp. when it is desired to be linked with a Termination Policy.

The lawmakers, judicial system and HRM in general has very RIGHTLY and in their far-seeing wisdom; desisted from linking these two terms.

This is the reason, our member Mb_04, is UNABLE TO FIND ANY SUCH REFERENCE for including in his agenda - a Policy for termination - which would allow easy termination by Labelling any one as INEFFICIENT !!!

The term INEFFICIENT can not be defined precisely; and thus is open to Interpretations- and this in the hands of certain companies which are short on ethics; can prove to be a disastrous weapon.

Even if Inefficiency is defined SCIENTIFICALLY; it is based on the rationale of Input to Output.

So, who is actually responsible for the INPUT ??

Which means if there is a shortage or problems with Input such as Work or business or Orders/demand ; power; raw material etc and it affects the OUTPUT; a worker can be blamed for the Inefficiency and fired unceremoniously, for none of his fault !!!

I think its better to restrict the use of this term to MANAGERS and Hire-n-Fire them at Will; as is being done today.

To use such a discriminative and ambiguous term; as a PLOY to fire Workers or Workmen sounds malafide.

Let these be governed by the RELEVANT ACTS which do not take into consideration the term "inefficiency" and hence rightly no reference or case laws has been found.

At times; the Law is always a few steps ahead of those who intend to circumvent it !!!

And let GOOD PROFESSIONAL MANAGERS be more pro-active and concerned on increasing the EFFICIENCY of their employees; as suggested by Mr. Divekar; rather than finding ways to Terminate on account of Inefficiency.

To conclude; in a layman's view one can say that when a company hires a worker when there is lot of business, he is very efficient (because its assumed no company would like to hire Inefficient workers; or admit that something is wrong with their hiring process); and when the business is bad; suddenly the same workers become INEFFICIENT !!!!

It is OK to RETRENCH to save the business; but its quite UNFAIR to brand them INEFFICIENT and terminate them with Impunity.

This is why Retrenchment, does not include Inefficiency. A company must be honest in accepting the facts of Retrenchment; and ADMIT that its UNABLE TO GET MORE BUSINESS.

Warm regards.

From India, Delhi
Seriously people all I am asking here is if there is a legal process in place. You all seem to be rather presumtious and jumping the gun here and taking on an employee cause. There is no termination going on here.. Just an attempt to understand the process. This is not an exercise to disguise termination but an exercise to understand the process. I have come across Supreme Court cases where an employee has been terminated for being inefficent. My issue here is whether that would that fall under misconduct or retrenchment and is there any case law on the topic. Request you to grant the other person a degree of intelligence to have evaluated all possible angles. Like I had told Mr. Dinesh, that any termination for inefficency has to be taken only after investigating the root cause of inefficency.. i.e., whether the company is responsible or the employee. There are said procedures and guidelines which HAVE TO BE FOLLOWED. WITHOUT WHICH ANY TERMINATION WOULD BE ILLEGAL. I did not ask for you personal opinion, I asked if there is a legal process and what is the case law. I would appreciate it if you can provide an answer to the said query and not drone on about the ills of management. If you do not have anything constritive to add dont answer. I REPEAT I AM NOT TRYING TO FIRE ANYONE FOR BEING INEFFICENT. I AM TRYING TO UNDERSTAND WHETHER INEFFICENCY FALLS UNDER RETRENCHMENT. IF THERE IS ANY CASE LAW WHICH STATES INEFFICENCY IS/IS NOT GROUNDS FOR RETRENCHMENT. THERE IS NO COLORABLE ABOUSE OF POWER HERE.

TO ALL THOSE WHO INTENDE TO TALK ABOUT HOW BAD COMPANIES ARE VIS-A-VIS TERMINATION OF EMPLOYEES. THIS IS NOT THE POST FOR IT. IF YOU HAVE CASE LAW ON THE SUBJECT PLEASE GO AHEAD AND REPLY.

From India, Gurgaon
Dear Mb_04,

The basic problem with your first post was lack of clarity. Without giving sufficient background information you had raised the first post. To clarify what you wanted, you had give three posts.

Inefficiency and retrenchment are absolutely two unconnected things. Simple reference to dictionary would have clarified your doubt. Further if you had referred any book on ID Act 1947, you would have got case law.

When you raise post without doing sufficient spadework, you are bound to get replies of this kind. This happens because of the perceptual gaps.

I am surprised at repeated usage of phrase "inefficiency". In the HR Management, the general term used is "performance" or "under-performance". How come you are yet to come to terms with this difference that I could not comprehend.

The last thing I would like to tell you is that you need to take training on "Concept of Communication". I do not mean concept of communication as "communication skills". May you be good at latter but you need to develop former that is for sure. Through your series of posts on the same subject, you have left sufficient evidence of this deficiency.

Gentleman when you raise some query, the basic courtesy demands disclosure your identity. You wanted to conceal your identity and yet you want people should peep into your brain, understand your thinking and give replies.

We are not paid consultants here. Even if you were to expect this from some paid consultant, he also would have failed on this count. Therefore, it is appropriate for you to choose your words carefully and choose your forum also carefully.

Instead of getting nervy at Mr Raj Kumar Hansdah's post, have some self-examination gentleman.

All the best!

Dinesh V Divekar

From India, Bangalore
I was very clear to begin with in my first post. My first post:

I would like to understand whether inefficency amounts to misconduct or termination of an inefficent employee can be under retrenchment. I am looking for case law which states that inefficency amounts to misconduct and termination for inefficency is/is not retrenchment. I have not found any specifc regualtion which defines inefficeny as misconduct. Even though, the section for retrenchment under the ID Act states "any reason whatsoever" I have found articles on the internet which state that termination for inefficency is not retrenchment. However, these articles do not provide an supporting case law.

It clearly states that its an exercise in understanding the process and the legal provision. No where does it state that I want to fire anyone for being inefficent. The mere fact that I am on this website shows that my research did not yeild the desired result and I hoped that I would receive a professional response to my query. Not a sermon on the ills of management. I use the term inefficency because non-performance or any other term is not defined by the Supreme Court of India or any other court. They define it as inefficiency. Also, we are not here to debate my communication skills or lack of. If this was such a forum.. I would be obligated to point out your shortcomings. I am aware that you or any other member on this website are not paid consultants and if I had paid for the service and received the kind of response I have to a query, I would surely undertake legal action to have my money refunded. As far my identity is concerned, I am in no way obligated to reveal my name/gender/nationality/profession etc. Knowing my identity has no relation to responding to the query.

In conclusion I have said this before, I do not require a personal opinion/sermon on the ills of management. Just the legal picture. If you do not have an answer, do not reply. If you do reply with a personal opinion (not backed by case law) please be prepared for any censure.

As a post script: before asking a person to "self-examine" I would suggest you do the same. All your replies are based on presumtions and are highly judgmental and sexist. What if I happen to be a woman.

From India, Gurgaon

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