Dear members,
A news clipping from today's TOI is attached to this post. The news highlights the importance of following the correct process while terminating an employee. The following emerges from the news:
a) A software firm employs an employee in Feb 2015. He was on probation for six months.
b) The employee was provided with training in July-Aug 2015 and again in Nov 2015 (in the USA).
c) In November 2015 the employee was paid the bonus.
d) In December 2015 the company confirmed his employment. But immediately places him under the Performance Improvement Plan (PIP).
e) Because of the differences, the management terminated his services in December 2015.
f) The employee challenges the termination and the labour court ruled in the employee's favour. His services were reinstated with back wages.
g) The company challenges the ruling by the lower court in the High Court. The High Court sets aside the ruling on reinstatement and the payment of back wages but tells the company to pay the compensation. The employee weakens his case because of his rowdy behaviour. He had sent threat mails to the management.
Observation of Inconsistencies in the Decisions taken by the Management: -
h) If the employee's performance was poor, then why was he confirmed at all? Why was his probation not extended?
i) If the employee's performance was poor, then why was he paid with the bonus?
j) Within a month since the payment of the bonus and two months since the confirmation of employment, how come he was placed under the Performance Improvement Plan (PIP)?
k) Before the termination whether the company conducted a domestic enquiry or not is not mentioned.
Learning from the Case: - The employment and termination of employment are serious matters and need to be seen with due sensitivity. If the employee had not shown his rowdiness, the HC ruling could have gone in his favour. In that case, the company would have been required to pay the compensation for more than Rs 1.5 Cr (INR 15 million). Nevertheless, the company is required to pay compensation for Rs 10 Lakh (INR 1 million). The company has to face the loss because of their inconsistent actions.
Additional Learning from the Case: - These are as below:
l) Define the measures of performance properly, and communicate to the employee, how the performance will be measured, when it will be measured, and who will measure it? The communication should not have any ambiguity so that both sides start interpreting the clauses at their convenience. The measures of performance should be communicated at the beginning of the performance cycle.
m) If the employee is recommended for a training course, then the employee needs to be communicated properly, what is expected from him after the training, what will be the training cost and in case of poor performance will the training cost be recovered from the employee?
n) The labour laws are equal for all industries. Therefore, no professionals should not live in the regime of the false notion that "our industry is different", "this is how our industry functions" etc.
Thanks,
Dinesh Divekar
From India, Bangalore
7855A news clipping from today's TOI is attached to this post. The news highlights the importance of following the correct process while terminating an employee. The following emerges from the news:
a) A software firm employs an employee in Feb 2015. He was on probation for six months.
b) The employee was provided with training in July-Aug 2015 and again in Nov 2015 (in the USA).
c) In November 2015 the employee was paid the bonus.
d) In December 2015 the company confirmed his employment. But immediately places him under the Performance Improvement Plan (PIP).
e) Because of the differences, the management terminated his services in December 2015.
f) The employee challenges the termination and the labour court ruled in the employee's favour. His services were reinstated with back wages.
g) The company challenges the ruling by the lower court in the High Court. The High Court sets aside the ruling on reinstatement and the payment of back wages but tells the company to pay the compensation. The employee weakens his case because of his rowdy behaviour. He had sent threat mails to the management.
Observation of Inconsistencies in the Decisions taken by the Management: -
h) If the employee's performance was poor, then why was he confirmed at all? Why was his probation not extended?
i) If the employee's performance was poor, then why was he paid with the bonus?
j) Within a month since the payment of the bonus and two months since the confirmation of employment, how come he was placed under the Performance Improvement Plan (PIP)?
k) Before the termination whether the company conducted a domestic enquiry or not is not mentioned.
Learning from the Case: - The employment and termination of employment are serious matters and need to be seen with due sensitivity. If the employee had not shown his rowdiness, the HC ruling could have gone in his favour. In that case, the company would have been required to pay the compensation for more than Rs 1.5 Cr (INR 15 million). Nevertheless, the company is required to pay compensation for Rs 10 Lakh (INR 1 million). The company has to face the loss because of their inconsistent actions.
Additional Learning from the Case: - These are as below:
l) Define the measures of performance properly, and communicate to the employee, how the performance will be measured, when it will be measured, and who will measure it? The communication should not have any ambiguity so that both sides start interpreting the clauses at their convenience. The measures of performance should be communicated at the beginning of the performance cycle.
m) If the employee is recommended for a training course, then the employee needs to be communicated properly, what is expected from him after the training, what will be the training cost and in case of poor performance will the training cost be recovered from the employee?
n) The labour laws are equal for all industries. Therefore, no professionals should not live in the regime of the false notion that "our industry is different", "this is how our industry functions" etc.
Thanks,
Dinesh Divekar
From India, Bangalore
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