Termination Of Employment Based On Appt. Letter Clause - CiteHR
Dinesh Divekar
Business Mentor, Consultant And Trainer
Madhu.T.K
Industrial Relations And Labour Laws
Nvraovskp
General Manager-hr
+1 Other

Cite.Co is a repository of information created by your industry peers and experienced seniors sharing their experience and insights.
Join Us and help by adding your inputs. Contributions From Other Members Follow Below...
Can management terminate the services of an employee who is in Branch Manager level just basing up on the appointment letter clause saying " this appointment can be terminated by either party with one month notice in writing or on payment of one month's salary in lieu of notice"? No reason whatsoever...
Requesting your inputs in this regard.
With regards
Raghavendra

Dear Raghavendra,
Letter of appointment is contract between employer and employee. If either party wishes to cease the contract then it cannot be continued by other party, however, terms and conditions of the contract for separation must be adhered to. For the cessation of contract, designation of the employee does not matter.
Thanks,
Dinesh Divekar
Bangalore - 560092
Can management terminate the services of an employee who is in Branch Manager level just basing up on the appointment letter clause saying " this appointment can be terminated by either party with one month notice in writing or on payment of one month's salary in lieu of notice"? No reason whatsoever...
Requesting your inputs in this regard.
With regards
Raghavendra[/QUOTE]

Termination of employment cannot be treated solely dependent on the contract of employment but in respect of Managerial level employees is it based on the letter of appointment. In other words, a worker cannot be terminated without following the retrenchment procedures mentioned in the Industrial Disputes Act and the Standing Orders of the company even if there is a clause relating to termination in the appointment letter. This is because the provisions of ID Act and the Standing Orders will prevail over the terms of contract in respect of workers covered by those to whom these Acts. Since in the present case the person involved is a manager, he can be terminated following the terms of appointment order, ie, by giving one month notice or payment in lieu of notice.

As far as possible, it is always good if you terminate ‘following the terms of appointment order’ only and ‘without showing any reason’, like poor performance etc. In the latter case, naturally, there is a stigma caused and the employee can challenge the termination order saying that he was not given an opportunity to be heard.

Madhu.T.K

Dear Friend

Without having proper / sufficient reason, no management prefers to terminate the services of senior employee like a branch manager. Under the given circumstances, reasons for termination of branch manager cadre employee may be on the grounds of poor / under performance / Misappropriation of company money / Acting against the interest of organisation / Insubordination etc. Generally, management prefers to terminate the services of senior level employees who are found to be guilty of any of above misconducts in an informal inquiry and they may take lenient view and does not want to mention the same in writing and go for establishing the same in formal way. In such a case, they may prefer to terminate the services of such employee by simply invoking the relevant clause of appointment order to avoid complications.

Strictly speaking, mere having a clause in appointment order, no employee service could be terminated until and unless there is a genuine reason for the same which will be known to both management and employee himself. If employee does know that exact reason for his termination due to any of above reasons, it better for him to keep quite. On the other hand, if he does not know the reason for his termination and if he is confident that he did not commit any misconduct knowingly or unknowingly, then he can insists the management for reasons for his termination. If management fails to give any reason, then, employee is having a right to invoke the jurisdiction of civil court and can challenge the decision of management for their act in terminating his services arbitrarily, without giving him an opportunity of being heard / without proper or justifiable cause / reason.

Regards

Dear Adv NV Rao,

The first paragraph of your post says Without having proper / sufficient reason, no management prefers to terminate the services of senior employee like a branch manager. Under the given circumstances, reasons for termination of branch manager cadre employee may be on the grounds of poor / under performance / Misappropriation of company money / Acting against the interest of organisation / Insubordination etc.

It would be naive to think that managers are removed only for the above reasons. There are unquantifiable instances wherein CEOs or MDs have removed managers because of their whims and fancies. Later they give semblance of "poor performance" for the removal. Intoxicated by power, when some manager does not go along with CEO or MD, he/she is shown the door. "Poor performance" is just an eyewash. A newly joined CEO is always given freedom by the board. Board's interest is different and hardly board members are interested in who is retained and who is removed.

None of the manager is willing to go to court and challenge the decision. After remaining unemployed for couple of reasons, somehow they manage to get next employment and forget the incident.

Your one of the subsequent paragraphs says that "Strictly speaking, mere having a clause in appointment order, no employee service could be terminated until and unless there is a genuine reason for the same which will be known to both management and employee himself."

This again is not necessarily the reality. When new CEO joins in, he tries to bring his own men/women. To do this, older ones are removed under the pretext of "organisational restructuring". While removing them they are paid as per the terms of appointment letter or little more. Therefore, there are no legal hassles. New person joins in with some another designation but by and large does the same job what the older one was doing.

The world many times is different from what it appears. So let us not get carried away by what we see.

Thanks,

Dinesh Divekar

This discussion thread is closed. If you want to continue this discussion or have a follow up question, please post it on the network.
Add the url of this thread if you want to cite this discussion.






About Us Advertise Contact Us
Privacy Policy Disclaimer Terms Of Service



All rights reserved @ 2020 Cite.Co™