The terms of the appointment order shall not circumvent the provisions of the Industrial Disputes Act and the Standing Orders of your company, if any. Therefore, whatever safe game you play about appointment order will not be maintainable if it is contrary to the rules of basic Acts. An employer is certainly free to terminate the services of employee(s) provided there is valid reasons. It should not be fabricated but real one. It should be taken as the last resort also. The termination policy should be dilute that if the employer wants to terminate services of employees, let the provisions relating to informing the government of the intention to retrench employees be followed and retrenchment compensation as prescribed under the ID Act paid to the respective employee. The law does not say that employer should retain a non performing employee but the employer has the right to fire him. But before doing so, give him an opportunity to improve his performance or try to relocate him by assigning some other task so that he could improve. If not found satisfactory, retrench him after giving prior notice and paying retrenchment compensation. It shall also be remembered that for an employee one year is more than sufficient to evaluate or appraise an employee and if you want to terminate him on the ground of non performance, do it immediately after you assess his performance. On the other hand, if you terminate services of an employee who has been with you for the last three or five years on the ground of non performance, it will be highly prejudicial and will be viewed as victimisation. Regards, Madhu.T.K