Due to a recent reorganization in the company, some employees have been made redundant. Although we have settled the cases for all others (all white collar), there is 1 blue collar employee, who is refusing to leave on mutual consent. I would like to know if :
1. Can we terminate him by paying 3 months’ notice pay (as per appointment letter) + Gratuity amount – as due?
2. Is there any additional payment required – e.g. severance pay that we paid to others (2 month salary / year of service) – if he is terminated
3. Is there any risk of him going to Labour Court and the court asking us to “re-hire” him mandatorily?
4. What is the best way to terminate him with least risk to the company?
I would be highly obliged if you can help me on this case.

From India, Delhi

The effect of the exit described in the post consequent on the refusal of the employee is "retrenchment" u/s 2(oo) and if he is a "workman" u/s 2(s) of the Industrial Disputes Act,1947.

Before retrenching an employee who has a continuous service of not less than one year in the establishment if it has 100 or more workmen on its rolls, prior permission should be obtained from the Appropriate Govt, as per Sec.25-N (b) of the ID Act,1947. Mr.R can go through the Act for other procedural formalities.

Whether the "retrenchment" is resorted to with or without prior permission as the case may be, one month's notice or one month's salary in lieu of notice shall be paid and a compensation should be paid to the workman at the time of retrenchment @ 15 days average pay for every year of completed service as per Sec.25-F of the Act.

Complying with all the above conditions before the exit of the particular employee is the only risk-free option available to the management. Otherwise it would be an illegal action entitling the employee for reinstatement and back wages if he raises an industrial dispute in this regard.

From India, Salem
Dear Mr. Umakanthan, Thank you so much for your response. This is very helpful to me. Yours Sincerely, R
From India, Delhi
Im working in a pharma company, i have given service bond for 2 years while joining, they given me appointment letter at the time of my joining in that my notice period after resignation is 1 month, Now i have completed 2 years, 2 months back (After 2 years) i have given my resignation but now my employer is not releaving me in one month they are telling that now the company policy is changed and i have work for three months compulsary but me joining date in new company is closer. now what i should do.

From India, Hyderabad

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