In Indian Labor Laws, though you have Apprentices Act but nothing has been specified about probation period. It varies from 3 months to 12 months (and now you have mentioned about two years, I am not sure if you are talking about probation period of two years or a contract of two years), based on the level of appointment. For example, if you are hiring a fresher or someone through campus recruitment then the probation will be higher compare to if you are hiring someone experienced.
Probation is like an engagement where employer and employee both are free to terminate a relation without much hassle. This the time to check the performance of an individual and the employee in turns evaluate the policies and benefits of the company. During the probation, an employee can be terminated for indiscipline, misbehavior and non-performance. Interesting thing is that if you are terminating someone during probation, you are not obliged to conduct any enquiry.
Regarding two month salary, it all depends up on the notice period as mentioned in the letter of appointment. If it is mentioned in the letter that, “in case of separation during the probation period, either party needs to give a two months notice period” and the company has not given notice to him, in that case…under law, he is entitled for salary in lieu of his notice period.
I hope this will give you some clarity.
Thanks and Regards
Sanjeev