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Thread Started by #Anonymous

Hi, Iam from a large proprietorship company in Delhi.

Recently some employees are hired in our company across various functions.

As per co policy, offer letter is given only after joining. The offer letter carries standard terms of termination for all levels/function. It says, co. can terminate any employee any time without assigning any reason with one months salary/notice whereas if the employee wants to leave he/she will have to pay last 5 months salary.

We want to terminate contract of couple of employees (middle-senior management) as they are not able to perform as well as not able to adjust culturally. These employees are nearly 3 months old and despite some reminders, they are not able to show improvement.

We want to terminate the contract without paying one month notice salary as we have given them verbal indirect indication on few occasion.

If we terminate contract of these employees without notice, can they go to labor court and challenge termination? what consequence we will have to face as an company?

Please advise as how should we handle the situation. we have to act fast so I will really appreciate your quick response.

Thanks Chetan
24th January 2014 From India, Delhi
Dear Chetan,
Appended are the suggestion/reply on your query : -
Whatever agreement Company has signed with employees & employees has agreed on the terms framed by the Company, will be valid in between both the parties (Empoyee & Employer).
As per the Agreement, Company can terminate the employees by giving them letter in writting in advance (Appropriate notice should be give or notic pay). You have a very valid reason to terminate them on the ground of performance.
Instead of teminate, ask them to resign & settle their dues.
If you will terminate contract of these employees without notice or notice pay, they can sue the company in labor/ civil court and challenge termination. In that case either company have to re-employe them or have to pay the compensation decided by the court.
24th January 2014 From India, New Delhi
Since the employees seem to be in the middle and senior managerial cadre, they do not fall within the purview of the industrial Disputes Act and thus they cannot raise any dispute in labour forums.The other option left to them is civil court which I am afraid, they may not pursue as the litigation consumes lot of time.It is also not desirable from the management point of view since they need to defend their case too by engaging a lawyer which also costs them. It is advisable to try for a win-win situation by persuading them to resign with one month notice.This way, they too do not carry any stigma and they will have sufficient time to find out an alternate employment.

However, if the management wants to terminate their employment on grounds of non-performance, it is better to examine certain issues before taking a call on it, namely;

1) whether the employees in question have been provided feed back about the areas in which they are weak;

2) Whether the management has ascertained the reasons for their non-performance such as bad and uncooperative boss or lack of training or guidance or coaching etc;

3) if so whether the management has offered to provide such support. You have stated that you have merely given them reminders to improve.;

4) Were the employees given enough time to improve:

While ti is true that no employer is expected to retain an inefficient employee and pay for his inefficiency, a prudent management and HR shall address these issues before taking a call on termination since it also involves livelihood of the employee. If it decides to take a final call of terminating their services, then it is desirable to try for a win-win situation a sit does not hurt any of the parties.

B.saikumar

HR & Labour law Advisor


24th January 2014 From India, Mumbai
Sir, thanks a lot for the clarity. Actually employees are neither given any warning in writing nor any chance to improve. Its been just 2.5 months.
Actually it is a case of wrong hiring, these were new positions in the co. & in hurry management made mistake in hiring people as well as explaining their expectation to the employees clearly. That's why both parties are dissatisfied (but management thinks more than the wrong fitment it is an issue of capability). To be fair with employees within 2 months fulfilling expectations is not justified knowing that they come from different background.
Now I have been given this task and we have to get the position vacated asap as co. can not continue to pay salaries.
You mentioned this can be challenged only in civil court, if you could give me an idea as how much time/money (average) it takes to challenge.
It will help me resolve peacefully the matter between employees & the mgt.
Thanks again for your great help.
24th January 2014 From India, Delhi
If management or HR hired misfits, then it is the management or HR that has to blame itself and shall not penalize the employees for their doing. It will be also difficult to retain a misfit.at the same time This situation all the more demands a win-win solution.You can explore the possibilities of locating them on the jobs where they can fit in after discussing with them or seek their resignations by convincing them that is the only way that ensures fairness to both.
B.Saikumar

24th January 2014 From India, Mumbai
I second Saikumar. It is always good if a proper evaluation is taken before you take a final call to terminate the services. When you admits that it is a case of wrong recruitment and wrong induction, you can always compromise to find an alternative position for the employee. Moreover, it is only 3 months since he joined and 3 months time is very less for an employee to show his performance and I feel if you clearly describe his duties and tell him what is expected from the him, you will get resource.

Now coming to the termination clauses, I have an opinion that your contract is one sided and a one sided contract may not hold good. Say, for example, there is a provision that the employer can terminate an employee without any reason and by giving the employee one month notice whereas the employee who has been working FOR the employer should pay five months' salary. It is clear that those who leave will be leaving for some better opportunities and career prospects and who will get it, only good performers will be able to get a chance to move. That means only performing employees move out. Had him be a bad performer you should have sent him out much earlier by paying one month salary/ notice. This good performer would have contributed a good amount towards the revenue of the company. In this scenario is it right to ask him to pay five months salary if he wants to go? No, I believe so.

Being an employee in managerial capacity, he may not be able to fight against the order of the employer in the Labour Court or other dispute redressal machinery but there is some thing more than this when you think about termination and that is professional ethics. When you find that he is a misfit and is an error in recruitment, the employee can also say that it is an error in his decision taking and he has taken a wrong decision by leaving the previous organisation and joining you accepting the promises and offers given by you. Certainly, no decision is free from RISK.

One more thing to add is that the designation and grade of employee as Manager/ Middle Management Cadre only cannot decide whether this person is a worker or not. If he was not given any functional responsibilities and authorities of a manager he will also land up in the same definition of workman.

Regards,

Madhu.T.K
25th January 2014 From India, Kannur
Dear ,
1. How you can assess a person with in 03 month. Did you mentioned this clause in appointment letter that "your performance will be assess in every 03 months and on that performance assessment company will have right to terminate your service.
2. Warning to improvement the performance in writing is necessary to make a point for termination the services.
3. Have you set the Goal (KRA & KPA)for the employees and informed them in writing.
4. Do you have the acceptance copy of appointment letter of employees.
5. Their Performance Assessment sheets should be available.
6. I think Notice period to be paid to the employees and only this will be the right step.
Brij N Sharma
HR
26th January 2014 From India, Bangalore
Dear Mr. Sharma, thanks for your comments. we don't have all such things in writing like KRA/KPA/Assessment etc.
assessment is done purely on the basis of business generated, we believe that the end of the day one must earn his/her salary by getting business or meeting management expectations.
We mention in our offer letter that in case of termination no reason shall be assigned and we have copy of acceptance.
So I think we can safely terminate without notice (as verbal warnings are already issued) and employees would be smart enough the gauge the danger.
Since its a case of middle-senior mgt so labor court option is also not available to the employees. So they will have to accept what management decides.
Please share if you have alternate views on various options available to employees in this case.
27th January 2014 From India, Delhi
Dear classiccopperian,

Your query is from legal point of view and you have got very good replies by experts in this field. However, I would like you to think from the organisation's culture point of view. My points are as below:

a) This is a case of poor recruitment. Termination or resignation after 3 months, what would be the cost of poor recruitment? On what parameters would you like to measure? Who has been made accountable for this loss?

b) Terminations of this kind, will they create fear among other employees? Will it not degrade the morale of existing employees? Have you calculated the cost of low morale and if yes, then on what parameters? Who is accountable for this cost?

c) Because of their termination, will the positive message or negative message be sent in the job market? Will you be able to attract right talent because of the whims and fancies of the management? Will existing employee refer their friends or ex-colleagues to join your companies? If no, then what is the cost of lost opportunities? Who is accountable for this loss?

Termination of employees may give solace to you or your management but it is nothing but hiding someone's inefficiency. From your last post, I find that you are deriving your strength from the tardy litigation process and not from implementation of principles of management. How long will this continue? Sentence in the first paragraph of your last post says "we don't have all such things in writing like KRA/KPA/Assessment etc." This sentence speaks volumes. Why the recruitment was not based on the KRAs? Whose failure is this and what is the punishment given to this person?

While selecting job candidates, we always place premium on selecting the "experienced" candidates. By selecting the wrong candidates, where was your or your management's experience? Leadership does not just lie in placing the blame at someone's doorstep but by doing introspection on why this case happened at all.

I have put forth my comments to bring to light the other side as well. Nothing personal as such against you.

Thanks,

Dinesh V Divekar
27th January 2014 From India, Bangalore
Dear Member

I hope you have already got the reply that you wanted from Legal standpoint. I would like you to introspect and find answers to the following questions. :-

1. When the matter of mishiring is well within the knowledge of the management, why is it not shouldering the responsibility and abiding by the rules and regulations framed by themselves. Secondly what is the action management proposes against the person / s who were responsible for the mishiring.

2. Does the management want to pass a message in the organisation that even if it management mistake the employees are the ones who is going to bear the responsibility and the burnt.

3. What if a group of Performers decide to leave the organisation without any notice after they know that the contract between the management and employee has no value for the management itself.

As a professional it is important that such aspects are put forth to the management as any haste in such matter damage the image of the organisation in a long run and your mishiring may result in misfiring too.

Regards

Preetam Deshpande
27th January 2014 From India, Mumbai
Dear Members, thanks for your valuable comments. I completely agree with your opinion. Since its a case of hiring for new positions so actually the management did not have clear guidelines/ expectation from this job. It is unfortunate for both employee as well as management.
Management wants to quickly get over it, so right now the concern is only from legal course of action available to the employees.
It seems that hardly any legal means available to the employees so management can strongly push the case of immediate termination.
Of course the learning from this episode will be helpful for both the parties.
27th January 2014 From India, Delhi
It is good that you are willing to make amends to your recruitment process. At least now, initiate a process to clearly define the roles, responsibilities of each role, competencies required for each role in terms of both qualifications, experience and specific skills and inter-relationships among different roles and formulate realistic and specific standards of evaluation of performance instead of measuring performance by some general standard like the quantum of business generated For example, you cannot compare the performance of a salesman who is asked to sell a refrigerator to an Eskimo to that of one who is asked to sell them to the people living in a desert under scorching Sun. so that the mistakes do not recur and the employees are spared the pain of separation.
B.Saikumar
HR & Labour law Advisor

27th January 2014 From India, Mumbai
Dear Chetan

The issue has been examined with care; and appropriate suggestions and comments given by members.

As an HR of a proprietorship concern, one can understand your predicament; and your understanding of the situation; and fair and balanced attitude towards both the employees and employer is praiseworthy.

While dealing with the issue, in the way as suggested by seniors; do ensure that the repugnant and one-sided clause of termination and resignation involving the NOTICE PERIOD is removed from your Offer and Appointment letter.

It gives a very bad impression about the company and its culture; and is bad in the eyes of Law. In fact in future, you might lose a few cases in the Court on account of such biased and exploitative agreement wherein you ask an employee to give back 5 months salary if he wishes to resign !!

Imagine, tomorrow if you get a better offer, how will you take it up ?? Would you pay up 5 months of your hard-earned salary, or wait for 5 months, by which time the other company may have cancelled or withdrawn their offer.

Warm regards.
27th January 2014 From India, Delhi
Hello mr. Hr
i have read your concern with the contents well noted. I must, however warn you that try as much as possible to be consistent with your reasons for showing you staff exit. You initially stated that there is a clause in your offer letter regarding termination. Such a clause applies when an employee commits no offence. In your case you are touching on performance issue. To talk about it, you must have enough evidence to butress your point to avoid future battles.
Eric kwadwo yeboah
hr - ghana
28th January 2014 From Ghana, Accra
Dear Members, thanks for your valuable comments. Your feedback will help me propose to the management about few changes required in the HR process.
In the meantime, I have been asked to asses & evaluate legal implications, in case employee approach civil court.
Management says that it requires time & money so employee will not opt for this. Also as per the offer letter the co stands on a safer side.
I have tried to present other side of it that such exploitative conditions, no warning, no evaluation, not mentioning the reason of termination etc may be challenged.
I would appreciate if you please share your views...is it really time consuming/costly affair that employee of middle-senior management can not seek services of an advocate.
Thanks again.
28th January 2014 From India, Delhi
There would usually be a provision in the offer letter, which talks about the probation period and the consequences of non-performance during the probation period. You can take it up accordingly.
29th January 2014 From Oman, Muscat
Dear Members thanks for your valuable comments. Like to know if during probation period of less than 3 months, can co. terminate legally without paying one month notice/salary?
In the contract it is mentioned that any time (including probation period)/without assigning any reason the company can terminate with 1 month sal/notice.
In this case is it legally binding to pay one month salary/notice to these middle-senior managers.
In case of termination, legally what is the maximum time period to clear the dues?
Thanks so much for your time & valuable comments.
29th January 2014 From India, Delhi
Dear Mr.KK thanks for your comments. I understand that services can be terminated during probation without notice.
what about the clause, which is mentioned in the contract which says that termination anytime will be done with one month notice/salary.
what will hold legally valid, the rule that termination in probation can be done without notice or the contract which says that termination will be done with notice period of 1 month/salary.
I will appreciate if you kindly clarify from legal angle.
29th January 2014 From India, Delhi
If the letter has been worded with notice pay during probation period, you should give notice pay. Any way, you have decided to fire the person. Then why should you think of saving one month salary? Pay and send him out and close the chapter
Madhu.T.K
29th January 2014 From India, Kannur
Exactly my concern too !!
There is a big difference between Human Resource management and other management disciplines such as Materials, Supply Chain, Production, Finance etc etc. in the latter cases the resources can be discarded or scrapped based totally on their utility and cost-benefit ratio.
Managing humans is an entirely different ball game apart from ethical, legal, humane; reputation/brand image and several other issues involved.
I totally agree and would like to quote this reply again for its brevity and giving the correct direction :
Warm regards.

29th January 2014 From India, Delhi
As per co policy, offer letter is given only after joining.
attribution https://www.citehr.com/482716-clarit...#ixzz2rroCtZDM
You amaze me... Kindly review and improve the attitude of HR Department toward your employees.
Other things can be improved thereafter.
30th January 2014 From India, New Delhi
Dear Classiccopperion,
Your overall wordings seem to suggest that there is a great amount of interest in only avoiding legal ramifications, come-what-may. But the advise received and the questions posed by Seniors doesn't seem to be of much importance. Additionally, your last post also signals of your possible intention of even not paying the notice pay to the unlucky employees... when the mistake is not at all theirs.
During the later part of your posts, you seem to have distanced yourself from your Management's actions, and claiming to have WIN-WIN etc. As rightly said by Mr Arvind Singh, there is a lot more improvement possible in the HR Department's functioning (in case you are indeed the HR personnel and not the proprietor himself).
31st January 2014 From India, Mumbai
Dear Mr. Mehta, I appreciate your comments, unfortunately being in the proprietorship firm Iam bound to follow instructions of the management or the proprieties.
The HR ground/or humanitarian ground may not prove to be useful to tackle present situation, as it is not as professional as it should have been. Hope you understand the situation. Since I was responsible for hiring so feel little guilty & sorry for the employees.
The intention of collection detailed legal information, so that I could present a solid case before the management making them realize the legal consequences.
This might prompt them to settle all the dues of employees peacefully & respectfully. I think this way I shall be able to help the employees.
So that's why I solicit information on legal options available to the employees.
31st January 2014 From India, Delhi
Hi Every one..

I am working in IBM India since 2008, I joined IBM as a eng but after immediate joining they have assigned me a Project as a profile of project manger , since that time till Feb 2013 I was doing project management in various account and they have given me Performance (PBC) rating always good as in 2008 pbc was 2, in 2009 PBC was 2+ in 2010 again 2, in 2011 2+ and 2012 due to some unfair treatment by manager he has given me pbc rating 3. and after one month in 2013 suddenly they have send me in redeployment pool. for that lot of fighting done between HR partner and manager but no good result came in my faver. after one month I have raised a concern with ibm internal forum "concern & appeal " but nothing happen good for me...in between of fighting HR partner assigned a work in a lesser profile and changed the account and manager.... anyway i started working with my new manager but end of the year they again given me Performance (PBC) raiting -3 with saying that I have not done good work , however my contribution was very good among the peers. . when I have denied to take unfair PBC rating and given all the relevant artifacts to him for re assessment. After that day my manager started torture on me and send lot of unfair mails and escalation to me with looping HR... then I raised my concern into very Senior managers about the harassment... I also reported him that my manager always forced me to work 2 shift in a day. for that i send all the relevant artifact to HR (manager's approved shift rota.) in this regard my manager said to HR that on that day I was not in the office for doing the 2 shift.. however this is fact I was not there in office and worked from home as he was told me to work from home over the phone among all the peers..for showing the fact i have a chat history which is showing that I worked 19 hours in a day and also there are lot of mails in my send folder which is showing that I worked 19 hours on that day. .

Now pls suggest..

1. Can I raise my concern into the Labor law with saying that I worked 5 years in ibm as a manager but they have given me lesser salary while other employee was getting 75% more than me... IS it work?

2. As so many argument done between me, HR and my manager... is there any chances if my manager can terminate me...

3. in case my manager & HR terminating me then in this sititune what action will be best for me... Should I go to labor court and ask for stay ? is there any court rule to ask employer to reject the termination till the inquiry completion. or without any argument , i have to submit my registration instead of their termination.

4. In-case , IBM is terminating me. then what will be happen for my career . ... in term of getting the new job, reliving letter and other document.

pls revert.

Raiz
3rd February 2014 From Australia, Pymble
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