Termination Due to Policy Violation: Do We Owe a Month's Salary? Legal Insights Needed

Dear Seniors,

If a person is terminated because of violating the terms and conditions of appointment or working against the interest of the organization, will he be paid for one month's salary? We have terminated the person with immediate effect on the 29th of the month because of the above reason and don't want to pay for that month. Are there any legal consequences regarding the same? We have also issued a termination letter to him.

Please provide your views on the same.

Regards,
Nishu

I would say that in any law, it is not mentioned that in a termination case you can't give the salary. If he goes to the police and asks for help, then you would be forced to pay him as the law states that you have to pay if he has worked. This is advice as the same situation happened in my organization, and that lady called the police, and the manager was in the police station for a few hours. But if you have mentioned this clause in the appointment letter, then there would be no problem.

Hello Nishu,

If it is mentioned in the standing orders of your organization (an example is the appointment letter) that the employee would not be paid any remuneration for the period worked if he/she is terminated on disciplinary grounds, only then can you go ahead with the above decision. You could refer to the Industrial Disputes Act/Shops and Establishments Act applicable to your state, as well as the Industrial Employment (Standing Orders) Act for further reference as well.

:-)

Dear Nishu,

I will call this type of termination as dadagiri. You terminated his services on the 29th of the month without following the principle of natural justice and without giving him any opportunity to explain himself. This type of termination is illegal.

Secondly, you do not want to pay him whatever wages he has earned up to the 29th, and you also do not want to provide a notice period. All approaches of your organization are illegal. If he decides to pursue litigation, he will likely win the case.

Regards,
J.S. Malik

Dear Seniors,

If a person is terminated due to violating the terms and conditions of appointment or working against the interests of the organization, will he be paid for one month's salary? We terminated the individual with immediate effect on the 29th of the month for the above reasons and do not intend to pay for that month. We have also issued a termination letter to him.

Please provide your views on the same.

Regards,
Nishu

Dear Nishu,

As it has been rightly advised that you need to follow the principle of natural justice while terminating the services of an employee. Even if he has committed misconduct, you need to follow the laws related to termination as per the standing order, i.e., show cause notice, charge sheet, etc.

In any case, if you had obtained full and final settlement accepted and signed by him, you would have had a good document to fight the case. If this man goes to court, there are more chances of him receiving a court order in his favor for reinstatement, and you would have to pay him all his salary, including for the period he did not work for you, along with all benefits.

It is better to call him, get his resignation, and settle his account. If he has committed any fraud, you can lodge a police complaint and follow the principles of natural justice. There can be a lot in this and cannot be discussed until all facts are known, i.e., the type of misconduct, etc.

Regards, Kamlesh

Dear Nishu,

If the person is not on probation, then you are not supposed to terminate him without assigning any reason. The reason must be specified and duly discussed from both ends along with written communication. Salary must be paid for the period of work done. If the person goes legal, then your management will come under a problem.

Regards,

Pankaj Chandan

Dear Seniors,

If a person is terminated because of violating the terms & conditions of appointment or working against the interest of the organization, will he be paid for one month's salary? We terminated the person with immediate effect on the 29th of the month due to the above reasons and do not want to pay for that month. Are there any legal consequences regarding the same? We have also issued a termination letter to him.

Please provide your views on the same.

Regards,
Nishu

I too agree that you cannot terminate any employee without taking into consideration the principles of natural justice. It is always mentioned that you need to conduct the domestic enquiry; the charges of misconduct of that employee must be proved on reasonable grounds. Equally, you must provide an opportunity to defend himself and give as many chances as possible so that it may not become an issue later.

My email: kalpana86.sreeram@gmail.com

Dear Malikji,

Hats off for giving an appropriate and befitting reply. HR in the private sector, especially in small companies, either do not know about natural justice or are influenced by the company culture of "malik-naukar" (master-servant) and tend to forget it. Hence, it is not at all surprising that after "illegally" (without following the due process) terminating the concerned employee, our member sharmaneesu wants to know whether the company can dispense with his salary too! It does sound funny, though actually, it is very sad.

Whatever the causes leading to termination, there are legal ways to manage the issue at hand, and also the post-termination issues.

Regards.

There is something called labor law. Your employment contract or offer letter is not a stamp paper thing. Labor law supersedes everything and is made to secure and safeguard against employment fraud and cheating that happens in the country. If the employee has worked, then your organization is liable to pay him his salary until his last working day, regardless of how severe the punishment is or how intense the mistake he might have made.

I was the victim of one such organization, and then I had approached the labor court to get it settled. I even received compensation from the company and an apology letter. If you engage in illegal business, beware that one day you will be exposed, either on the front page of newspapers or on the main page of websites and blogs. I think the company would not like things to escalate to this level. Isn't it?

I agree with Malik, sir, as it really seems like a display of authority. Next, I must say that if you think from the employee's point of view, you will realize that one month's salary is very important for a person until he/she secures a new job. Therefore, in my view, you should have provided that person with his/her salary.

It is illegal to terminate an employee without sufficient grounds to do so. Even if you have sufficient grounds to terminate the concerned employee, you have to give him a chance for an explanation. If the concerned employee approaches court, the verdict will most likely go in his favor, and in that case, you may have to cancel his termination or pay him more compensation. In any case, you have to pay him for the period he has worked. You may move legally against him if he has harmed company interests.

Dear Mr. Malik,

Whatever he has done was in written form. His termination was also done after his acceptance of his committed act. He has no guilt for what he has done; the only issue is that top management is not willing to pay the amount. I have discussed all these things with them, and I hope they will be ready to pay. Apart from this, we haven't mentioned any such thing in the appointment letter.

Regards,
Neesu

Hi all,

Please note, I am going through a serious problem. I was terminated from service from an MNC where there is no service rule or any point mentioning the termination clause. The MNC is just playing a dadagiri role. I am fighting with my own ability.

I went to the shop and establishment where the MNC produced a circular, and now the MNC is demanding that they have terminated my service with this circular. I have demanded the full salary, citing an apex court order case as the MNC has terminated me without any service rule or statutory power to terminate my service given in the appointment letter.

Please enlighten me on how to fight against their dadagiri.

Nabolbona

Hi all,

How much salary is available in case of termination without any service rule or statutory method? I have been facing a serious problem for the last few years trying to regain my service, but all efforts have been in vain. The MNC terminated my service under the Model Standing Orders of West Bengal and paid me only subsistence allowance. However, my service is not governed by the Model Standing Order.

In seeking justice, I approached the Shops and Establishments in West Bengal, but they have indicated their limitations in handling the case. Nonetheless, they have pointed out some areas. Can anyone help me find a good way to attain the justice I deserve?

Nabolbona

I was terminated from the BPO on the 29th of July due to misbehavior with a customer on only one occasion. Surprisingly, I did not receive any prior warnings before being terminated abruptly without any salary. Now, I am looking to file a claim against the company. Please assist me.

I have a case where an employee was serving his one-month notice period (completed 18 days). On the 19th, the employee was terminated/sacked based on the suspension letter. On-the-spot termination was done due to misconduct, violation of the security policy, and taking the company's intellectual property home.

The company is in possession of all the personal belongings of the employee (mobile phone, laptop, external hard drive, etc.) and is conducting a forensic investigation to determine if any data was transferred to a third party.

Employee Restrictions During Investigation

The company stated the following to the employee:

1) He can't engage in any meaningful employment until the investigation is complete. Please advise if there is any law that protects the employee in this scenario, or if it is true that the employee cannot seek employment elsewhere.

Full and Final Settlement

2) The company is silent and not mentioning whether the employee will receive a full and final settlement. Please advise if there is any law stating that he should be entitled to a full and final settlement. If so, kindly specify the same.

Point to be noted: There was no monetary loss to the company, nor was any confidential client/employee information disclosed to a third party. The breach was solely related to accessing the company's confidential information and intellectual property, not client-related.

If anyone has answers, kindly request them to post the same.

No company can terminate any permanent employee without proper notice. There is a principle called the "Natural Law of Justice" where both parties have equal rights to prove their side. If it is not followed, the company management will be in trouble. The termination needs to be accompanied by a show-cause notice and a charge sheet, where the employer must give a reasonable amount of time and patience to the employee to present his case.

Moreover, if our friend doesn't want to pay his employees' salaries, the management will face significant issues, and HR will also be involved as HR is responsible for providing legal advice.

Legal Implications

1) Section 420 (Non-Bailable) Fraud
2) Section 427 Companies Act
3) Criminal defamation (if you are firing him with a criminal charge)

It has been observed that some companies deduct gratuity amounts from salaries. If you are doing the same, you are at risk of legal action. If your salary components are not proper, such as HRA or dearness allowance, you are also in trouble.

It is evident that the employee is being fired not on disciplinary grounds but due to personal grudges. He can seek legal recourse, and any sub-judicial court can issue a non-bailable warrant against your management or nominated individuals. If he can prove his case in court, you will need to pay him for the entire period he is laid off, as he already has his termination letter as evidence. Therefore, please follow a constitutional approach.

Thank you