Legal and Ethical Dilemma: Can You Terminate a 15-Year-Old Employee with Notice Pay?

Dear friend,

I need your suggestion. If an employer no longer requires the services of a 15-year-old employee due to his changed working behavior, can it be legally justified to terminate him immediately by giving him one month's notice pay with all his dues cleared? There was no appointment letter issued to him at the time of his appointment. What else is required to do? Please help. Early suggestions would be appreciable.

Regards,
Amita

Thank you for replying. However, there are many reasons why the employer is not happy with him anymore. He is instigating other employees, creating an unhealthy working environment silently without leaving behind any reasons to explain. He refuses to resign, and management wants to terminate him immediately. What should be done in this situation? The charge sheet procedure is lengthy. What is the best way to terminate him legally and get rid of him?

Dear [Recipient],

You can discuss with him the option to resign after paying him some extra amount. Of course, his termination without a proper charge sheet, inquiry, etc., will be illegal. Besides, you are required to pay him retrenchment compensation equal to eight months' salary.

Regards,
JS Malik

It seems strange to me to believe in changed behavior of an employee after working for 15 years. Such incidents generally occur if he/she is neglected or undue favor is given to his/her juniors by a new management (due to a change in management).

Dear Amita,

You have to check if any letter of offer was issued to him or not because sometimes companies only issue offer letters. Another thing to check is if any personal file has been furnished for him or not. If not, then you can immediately terminate him without any formalities.

Regards

In this regard, my submission is: What's the use of an offer letter issued to him or not? He is a 15-year-old employee, and his name is entered in various records that the factory has maintained until now, as the company has deposited his ESI and EPF contributions. From there, it is clear that he is an employee of the company.

The best way is to transfer the employee or change his work responsibilities and neglect him; his behavior will change. He must not be given importance in the organization until he changes.

My legal view is that the first step is to issue him a show-cause notice of short duration for his misbehavior to make him panic.

Hi mdhannaat,

Your attitude towards organizational issues is similar to the smiley with your name "devilish." You need to read some inspirational books on HR subjects. Start with "GUNG HO" by Ken Blanchard.

Termination of a 15-year-old employee without any valid reasons is unjustified. If the employee committed any irregularity, the management has to take up the process of conducting a detailed inquiry by appointing an Inquiring Authority. After the receipt of the inquiry report, an opportunity must be given to the employee. Only after taking into account the explanation of the employee, the management has to take action as deemed fit in accordance with the findings of the Inquiry Report. These are the principles of natural justice where several judicial pronouncements were delivered by various lower and higher courts, including the Supreme Court of India. The management cannot remove any employee with vague reasons. Forcing the employee to tender resignation is also not valid according to the law.

Suri Babu Komakula

Hello Vinod Bidwaik,

As per the Payment of Gratuity Act 1972, an employee who has more than 5 years of service should be paid gratuity if he is retired, removed from service, or deceased. The person in the case above has 15 years of service, so he will receive around 8 months' salary.

Calculation of Gratuity:
Gratuity = last drawn Monthly Salary / 26 x 15 days x Number of years of service.

Penal Provisions:
Nonpayment of gratuity payable under the Act is punishable with imprisonment up to 2 years (minimum 6 months) and/or a fine of up to Rs 20,000. Other contraventions/offenses attract imprisonment up to 1 year and/or a fine up to Rs 10,000.

On a simple note, transfer him to the sales or liaison department where he has to deliver immediate results. If he is competent, he will achieve good results, or if not, the organization can make the necessary groundwork in due course so that employees do not experience discomfort.

If he is not performing well, there is no need to portray him as a hero by terminating him or making a martyr out of him. Simply change his role and place him in a situation where he will lose his stature.

The organization's interests always come first, every time.

NS

Dear Mr. Malik,

Can you elaborate on 'eight months' salary as compensation? My understanding is double months' salary plus gratuity as compensation in case of retrenchment. Please shed some light on this in line with the ID Act.

Dear,

As per the Industrial Dispute Act, you are required to pay compensation equal to 15 days' salary for every one year of service. If he has put up 15 years of service, then 225 days' salary should be paid as retrenchment compensation. Still, this termination will be illegal without conducting a proper inquiry.

Regards,
JS Malik

Dear friend,

In my opinion, the primary mistake was that you did not issue an appointment order to him. But now, since you do not require his services, you can terminate him, but the only thing is you need justification for your termination.

I believe that in this special case, you need to sit with the management because he has served the company for the past 15 years. Therefore, you cannot ignore his services.

Alternatively, you can sit with this employee and guide him about his behavior. If he cannot change his behavior, then the same should be informed to management, and as per the management's order, you can terminate his services.

Step 2: Formulate policies through management and set the following policies:

1. Recruitment policy
2. Leave policy
3. Code of conduct
4. Performance appraisals
5. Salary and increments
6. Retirement policy, etc.

Implement the above policies through management so that you have justification for your actions. Please note that whatever you need to do, take prior permission from management. This is very important. You cannot ignore management because, in your opinion, this employee may not be good, but we do not know what management is thinking. According to their opinion, he may also be good.

Therefore, you cannot make a hasty decision on this. Please follow the management's decision.

Regards,

Bharath Dwajh A.S.

The best solution is to talk with him clearly and share your observations with him. Also, try to find out the areas where he is not doing his best and the reasons behind this. If you find something that can be managed, then keep him on; otherwise, ask him to either resign or do his best. If he agrees to do the work as suggested or expected, then give him a trial period of 1 month. If he does well in that period, you will have found the solution.

Dear all,

The response to Amita's query baffles me. I am pained to note that we are promoting some sort of skullduggery management!! Are we here to promote all sorts of unethical practices as HR professionals.

The query is for the legal method of terminating an employee with 15 years of service even though no appointment order has been issued. From the description, it appears he is in the workmen category. The legal position is very clear that an employee who has served for more than 240 days in the previous 12 months cannot be just wished away except by means of termination of service as a result of disciplinary action or retirement, lest it be termed as illegal retrenchment. The effect of illegal retrenchment is that he comes back with a vengeance and all back wages. Whether there is an appointment order or not has no significance since the courts can direct you to produce the muster roll, PF contribution details of remittance, etc., which would amply prove the employer-employee relationship. Terminating an employee in the workmen category by payment of notice period salary is not viewed favorably by the courts. For irreverent behavior, an inquiry cannot be dispensed with. The legal position needs to be clearly underscored.

Dear Friends,

I have the following suggestions to offer:

1. Can the queries be made more specific and complete in one go? Instead of using long sentences and often incorrect expressions (I am not trying to find faults, please), can we make use of simple English and explain the matter in small sentences?

In the instant matter, it is stated that the employee was not given an appointment letter at the time of his joining. Someone has correctly asked if it was given at a later stage.

2. It will be best if the queries are made point by point, maybe using bullets.

3. Before sending the query, read the matter that has been typed and satisfy yourself that you have your query complete and proper in all respects.

This would help in preventing an EMI-based answering process.

In this matter relating to an employee who has been in employment for 15 years, merely saying that the employer does not want him any longer because of his changed behavior and therefore can he be terminated.

Mr. Malik has rightly said that such summary termination will not stand the test of law; it would be illegal.

The correct process would be:

1. Start issuing advisory notes and warning letters whenever he is seen to be indulging in any form of disorderly conduct. Create a record of bad behavior against the employee. It should be properly documented.

2. After a few such letters, his written explanation can be called for his disorderly behavior at work.

3. If his objectionable conduct relates to the involvement of any other employee, get such employee/s to give written complaints against him.

4. Once you have a few instances properly documented/recorded in his file, you could go ahead and serve him with a detailed and properly worded Charge Sheet and start proper disciplinary action against him.

5. If you feel that his presence on the premises is detrimental to the overall discipline in the establishment, you could even suspend him, pending further investigations into the matter.

6. Later, you could institute a Domestic Enquiry against him and eventually dismiss him from the services of the company.

This would be the correct legal procedure to dismiss him.

There are several other more subtle and practical ways of getting rid of troublesome employees. I wonder if we should pen down such solutions on this platform.

Best Wishes,

Vasant Nair

Dear Amita,

Instead of terminating him, it would be better to change his responsibilities. Try offering a promotion to a lower or least staff level category to motivate him. If he refuses to take on new responsibilities, you can give him two options - either accept a new assignment or leave the company. This way, you can handle the situation in a more legally compliant manner.

Thank you.

Hi all,

Is there any special compensation (apart from one month's salary) for a person terminated after three years of service in a BPO?

You need to open up and tell him or her what is expected, give them a chance to improve, and if things don't change, then you fire the person.

Before giving any advice, I would like to know the nature of work he was doing. In the absence of an appointment letter, his nature of work will determine if he is a workman as defined under the Industrial Disputes Act, 1947, or an employee. Thereafter, I can advise you properly.

Advocate Pankaj Bandekar

Hi all,

Is there any special compensation (apart from 1 month salary) for a person terminated after 3 years of service in a BPO?

1. One can get compensation depending on the terms of the appointment letter/contract.
2. The reason for termination is more important to claim special compensation.
3. In the absence of an appointment letter, we will need to know his nature of work so that we can decide if he is a workman or an employee.

Regards,
Pankaj V. Bandekar
Advocate

That employee has given 15 years of his services. It's natural to witness a change in his behavior over time. Termination will not solve the purpose as there is no guarantee that the person who replaces this employee will be better. I feel management must openly discuss his behavior and let him know how it is unhealthy for the organization. Help him realize his mistakes. At least give him a chance for improvement.

Dear Mr. Amit,

Upon reviewing the discussion, I would like to advise you that without an appointment letter and Standing Order, you cannot terminate his services as he has not signed any terms and conditions of the company. How can you terminate his services?

An employee cannot be dismissed in the absence of a specific clause in the appointment letter.

If the terms and conditions are not specified in the appointment letter, an employee will not be bound to abide by subsequent conditions (from the book of Labour Law Reporter).

Shish Ram Uniyal
09811581660

Dear Pankaj,

Here is a reply to your query. He is working as an operator and displaying negative behavior these days. He is silently instigating other employees whenever management introduces anything good for them. He always disagrees without any reasons.

Recently, Diwali gifts along with cash were distributed among the employees. However, he, along with a few other employees, refused to accept them. When asked for a reason, he mentioned that they didn't want it as it creates a very unhealthy working environment and could potentially spoil the atmosphere in the factory in the future, which the management aims to address.

The current situation is such that the employer is reluctant to continue employing him. Due to his influence, other employees have begun to behave poorly. When questioned about their behavior, they remain silent. The situation seems to be spiraling out of control, resembling a 'go-slow' method.

Please let me know if you need further information or assistance.

Best regards

I want to know the process to handle this situation as we don't want other employees to be affected by this. As per the suggestion, we have decided to issue him a show cause notice as we have tried to get his resignation, but he has refused to resign. He is acting very smartly, thinking that management cannot do anything to him. He may be affiliated with a trade union, as for now, we don't have any trade union in our company.

Dear Amita,

I may have replied to your question, but before that, I just want to know if the case is still pending even after a long duration (approximately 2+ years).

Hi Amita,

You shouldn't be terminating the employee until you have proper evidence for the reasons you want him to leave. It could also be that some other employee is conspiring against this individual.

Before making any decisions, you should conduct an investigation because you must also consider the fact that the employee has been with the organization for 15 years. Why has he suddenly started behaving differently?

Regards,
Maithili

Dear Aysharma,

I didn't get your case is not pending for long. I just posted my query two days back, and it's all about the present situation.

Thank you.

Hi Amita,

It happens then and there. Whatever may be the thing, you can't terminate an employee just like that. It will definitely attract unwanted consequences. You have an HR manual. Please verify the guidelines for resignation or termination and act accordingly. Otherwise, issue a notice of relieving detailing all the settlements he is legally eligible for.

Alternatively, simply neglect him, don't assign any tasks, and observe closely. Believe me, I am sure he will submit his resignation.

Regards,
Thiru

My question remains unanswered.

Is this employee still in the job, or has some action been taken?

Mr. Amitasingh,

See, termination is not the solution that creates unrest in the organization. Basically, first, determine why he was behaving in this manner. Is the management neglecting his services by not providing proper recognition, promotions, or giving junior employees promotions ahead of him? First, investigate the reasons behind his changed attitude. Since he has been working for the last 15 years, he should be in a good position, shouldn't he? If not, what are the reasons behind it? If his performance is not up to the mark, then issue a warning letter or counsel him. I personally feel that terminating the service of an employee who has been with the company for 15 years is not the solution. I think he is almost 45-50+ years old; think once and twice before making a decision.

Venkatesh.V
Hyderabad.

Dear Amita,

I am very curious to know about the Show Cause Notice you have issued to the concerned operator. The action taken by you in issuing the Show Cause Notice requires some more discussion. Therefore, for the benefit of all members, it will be nice if you can mail the Show Cause Notice in its exact form. To give you a hint, there is a fine difference between a Show Cause Notice and a Charge Sheet. Based on your response, we can carry forward this discussion, which will eventually prove to be extremely interesting and useful to all.

Best Wishes,
Vasant Nair
HR Advisor

Hi all,

Termination is not the remedy for a workman who has worked for a long 15 years. The employer should first understand why his behavior changed, identify the reasons, explore solutions, and guide him towards improvement.

How long should an employer retain the workmen they choose? The great olden tradition in India has changed drastically since the corporate giants emerged. Today, finding an experienced workman has become a challenging task for HR professionals. Employers should strive to retain experienced employees, work on solutions to align them, as ultimately, we are not on a battlefield thinking about political lines but part of a workmen's family along with the employer. Everyone can make mistakes, and corrections should be made through discussions.

Even if the employer makes efforts to address faults, whether their own or the employee's, and fails to find an appropriate solution, leading to no other option but termination, the process is lengthy. As elaborated by some senior HR friends in this thread, if an employee is proven at fault or guilty, they can be legally terminated, not forcefully. Termination should be the last resort, not the initial course of action.

Mohan Rao, Manager HR

Respected Sir,

150 confirmed employees were terminated in January 2003 by Wockhardt Pharma because of the union. Since then, I have kept faith and been assured from time to time by management via call and phone that I will get my job back. It has been more than 6 years, and this assurance has not materialized. Only 25 people from the union are currently in court in Mumbai. Can you tell me the truth? With 25 people in court against the company, would there be legal complications if my services are restored? Some top management individuals at Wockhardt are willing to rehire me, but a decision has not been made. My track record is spotless with significant achievements.

For the past six years, I have been waiting for justice. I urgently need your opinion on whether HR can reinstate me without legal issues. They mention concerns about the legal implications if I am brought back while 25 people have a case in the high court. Can you provide me with truthful information so I can present the facts to the chairman and HR head? I am going through significant difficulties and require guidance on the legal standpoint. If you share your contact number, I will reach out to seek advice. How would Wockhardt's legal position be impacted if they decide to bring me back while the case involving 25 people is ongoing in the high court?

My email ID is [email protected], and my phone number is +919898099100. Thank you for your assistance.

Dear Amita,

I agree with Mr. Rao. However, you see, there is always a mixed reaction on termination issues. But what goes on the floor is something different, and only you know the facts. The daily hating session that is brewed by the disgruntled staff fills the entire floor, and you have a bad smell.

This is what we have done in our factory with a similar case; not sure if it helps you:

1. After carefully identifying the problem maker, we called them for a discussion.
2. A meeting of GM, HR, and the Floor manager; the floor manager point-blank told him that we had complaints about his behavior on the floor and that we fear he is instigating the other members as well.
3. The General Manager, who was chairing the meeting, acted as a secret cushion and a well-wisher of the troublemaker, asking what's going wrong with him.
4. The GM also inquired about his family and how all are doing at home. In fact, we tried to get his home number to speak to his wife.
5. HR asked if we had any financial difficulties, etc.
6. The Floor manager, on the other side, was firm about his behavior on the floor and informed him that he is not the same guy as before.
7. We actually played with his emotions to get the real issue and force him to speak the truth.

In our case, the truth was that after several years of service with the company, the new staff were given very high salaries, and no one now asks him for any major decisions on the floor. He was also concerned about the growing education costs, etc.

Action: The Floor manager thereafter always included him in all decisions on the floor. The GM gave him a 5-day day-off as goodwill. The company also provided him with an interest-free loan for his children's education. Things were returning to normal on the floor, and the goodwill of the company spread across the floor.

Regards,

ukmitra

The best way is to transfer the employee or change his work responsibilities and neglect him; his behavior will get changed. He must not be given importance in the organization until he changes.

Mahesh
09326704647

I agree with Mahesh. We too, in our company, transfer the employee who does not join multiple times, and it legally becomes a termination without paying extra. Also, "no work, no pay" is a Supreme Court ruling. Therefore, when he/she does not join the transferred place, it becomes legal.

Ajay Mittal

Dear Sir,

I am Shanmugam, working as an HR Executive in Chennai. Could you please assist me - can a company provide all three types of leave: 1. Earned Leave, 2. Casual Leave, and 3. Sick Leave - as per the law?

Thank you in advance.
Shanmugam

Mail ID: gvshanmugam@gmail.com

Dear Vasant Nair,

In reply to your suggestion, nothing was issued to him at the time of his appointment as he was entered into the organization as a workman at that time with a reference from someone. Moreover, as you have written about the offer letter and personal file, what if they are not issued or maintained? His name is already there in registers which are required to be maintained under labor laws, and many returns have been filed to date. It will be traced out from there that he is employed by us. I hope you are clear about it.

Thank you.

Dear Shanmugam,

As you have inquired about leaves, let me clarify. Yes, a company can grant all three types of leave. The provision regarding earned leave is outlined in the Factories Act under Sec.79. Every employee who has completed 240 days in the preceding year is eligible for earned leave in the current year, with one leave granted for every 20 days worked.

Regarding casual and sick leave, every employee is entitled to a minimum of 7 casual and 7 sick leaves if ESI is applicable. In that scenario, sick leave is governed by the ESI Act. I hope this addresses your query.

Corrected text has been reformatted for better readability.

Dear Amita,

I am afraid I have not made any suggestions at all with regard to the issue of any letter, etc. I have, on the contrary, suggested that such suggestions made by some other member (Bhagwan-07) should be avoided since they are rather childish and improper.

Vasant Nair

First, we have to understand the cause for the change of behavior of an employee. It may be due to an internal or external factor. If it is due to an external factor, the employee will be held responsible. If it is an internal problem, then the employee should be given a notice to change with specific directions. If the same behavior continues, the employer has the right to take terminating action. Every human being in an organization is an asset, and an employee of 15 years should be considered a valuable asset in terms of knowledge. If the attendance is consistently poor for more than 3 years, the employee is eligible to address this matter in the court of law.