Navigating Employee Termination: What Are the Legal Steps and Requirements?

Hi Sarikajaanu,

I would like to know some of the policies that have to be followed as per the act at the time of terminating any employee. When an employer terminates an employee, should the employer issue the termination letter in written/printed format or just communicate through word of mouth to him/her? If the letter has to be issued, should the employer mention the exact reason for the termination (such as the 1/2/3 months notice)? Is there any act for this that has to be followed? Could you tell me some of the termination activities that have to be followed?

Regards,
Sarikajaanu

An employee can be terminated following the rules provided in the Standing Orders of the company or the Industrial Disputes Act. Section 25 F provides that no employee who has been in continuous service for at least one year shall be retrenched by the employers without giving him one month notice of their intention to terminate and without paying retrenchment compensation at the rate of 15 days' salary for every completed year of service. If the company employs more than 100 employees, then chapter VB of the ID Act will apply to it, and in such cases, section 25 N will apply, and accordingly, the notice required to be given for retrenchment is three months and not one month.

It is mandatory that the notice issued should contain the reason for retrenchment. Moreover, notice in the prescribed form (Form P or Form P (A), in the case of companies employing 100 or more employees) shall also be given to the government, stating clearly the reasons for retrenchment. In the case of companies employing more than 100 employees, mere intimation to the government of the company's intention to terminate service is not enough, but approval by the government is required to be received for effecting retrenchment.

For the termination of service for misconduct, proper disciplinary action shall have to be conducted. In such cases, the notice period will not have significance, but holding an inquiry as per Standing Orders and following the principles of natural justice is important.

Whereas, if an employee who was given a warning for not improving the quality of work during probation is terminated, such termination will be treated as termination simpliciter and not as punishment, and in such cases, the management will be justified in their act of not holding an inquiry provided notice informing termination is given in advance (1 month or 3 months as the case may be).

Any order of termination of service, whether issued to a probationer or a permanent employee, should be in writing.

Regards,

Madhu.T.K

Hi,

It is not clear how an employer can terminate without any service rules prevailing in the company or in the appointment letter.

Regards,
nabolbona