Is It Legal to Terminate an Employee on Probation Without Giving a Reason? Seeking Case Law Insights

Hi,

An appointment letter of a company contains the clause of a probation period as follows:

"You shall be on probation for a period of 6 (six) months, and the said period shall be extendable, but the total period of probation shall not exceed 9 (Nine) months. In case you do not receive any letter of extension on the expiry of your initial period of probation, it shall be deemed that the probationary period has been extended by 3 (Three) months. During or on the expiry of the period of probation, initially fixed or subsequently extended, your services shall be terminable without notice from either side."

As per this, if the employee was not given a confirmation letter, then his probation period shall extend to 9 months. In this case, if the services of the employee are terminated, then is it necessary to give a reason for such termination? Can you please quote some source/case law also for your opinion?

The sample will be as follows.

Your services are being terminated with immediate effect as per clause... of the appointment letter no... dated... issued to you.

Hi Hinnagarg,

If an employee is not given a confirmation letter after 6 months, then it means the confirmation is extended. If an employee is not given a confirmation letter after 9 months, then it means the employee confirmation is done (by default, he becomes a confirmed employee as per law).

Basically, organizations do not encourage terminations because even if the employee makes blunders or performs poorly, they will be asked to resign and be relieved from the organization. This is done in order not to spoil their career.

If the organization decides to terminate, then it should definitely mention the reasons (such as, as per the observation, his performance was not up to the mark or misconduct or misbehavior or negative attitude, etc.) in his termination letter.

Bye

The legal position is settled in the matter:

1. Where the workman has completed 240 days of service (inclusive of weekly off and other paid holidays, etc.), then he can be terminated only after following the procedure in this regard.
2. But if the service period is less than 240 days, then termination can be done without assigning a reason by way of termination simpliciter.
3. As regards managerial and other supervisory employees, the above-mentioned protection of law is not available to them. The only thing is that if the organization is a PSU or Government firm, such an action can be done without disclosing the reason.
4. However, as regards the private sector, such legal impediments do not arise.

In the above-referred clause, it is not mentioned that reasons need to be disclosed. Hence, in such cases, the reasons shall have to be stated, but notice need not be given. Remember this is needed particularly where the service exceeds 240 days.

Regards,
KK