Navigating Employee Termination: What Steps Are Essential to Ensure Fairness and Compliance?

How many phases are mandatory before terminating an employee? And what are they?

As an HR professional, it is essential to follow a structured process when terminating an employee to ensure fairness and compliance. The number of phases required before termination can vary depending on company policies and legal requirements. However, some common phases include verbal warnings, written warnings, performance improvement plans, and final discussions before the actual termination decision is made. Each phase serves as an opportunity for the employee to address any issues and improve their performance before facing termination. It is crucial to follow these phases diligently to mitigate any potential legal risks and maintain a positive work environment.

Termination of service for misconduct shall be made only after giving the employee an opportunity to be heard. To be justifiable, termination of service after holding a domestic enquiry should involve the following procedures:

1. Serving a Show Cause Notice calling the delinquent employee to explain why action should not be taken.
2. If the explanation is not satisfactory, issuance of a Charge Sheet describing charges.
3. Conducting a Domestic Enquiry.
4. Obtaining the report of the enquiry Officer.
5. Serving a second show cause notice calling on him to show cause why the report of the enquiry officer should not be accepted.
6. Terminating or dismissing the employee.

In the case of termination of service due to any reason such as the expiry of the contract period, there is no need to follow the above procedures.

Regards,
Madhu.T.K

Dear Madhu T. K., I run a startup in Mumbai, India. I recently terminated an employee for misconduct, i.e., regularly getting into petty fights with other employees, disturbing the workflow, and yelling at seniors without reason. The employee has submitted an apology letter accepting the misconduct in written form and accepted the termination letter; however, he is now demanding one month's extra salary as he was terminated by the company. I want to know if there is any corporate law that fits this situation. I am giving the salary for the number of days present but certainly don't wish to give one more month's salary for which he hasn't worked. Kindly share legal information on this.

Thanks and regards,
Sandeep R. Sharma

Since this is a termination for misconduct, he cannot demand compensation. If the termination was done after completing a formal inquiry and giving the accused all opportunities to prove his innocence, then there is no problem. However, if you had not conducted an inquiry but simply terminated him, then you may need to pay him one month's salary and settle the matter. Please make sure to document it.

Regards, Madhu.T.K

Yes, I did conduct a meeting where I asked him to give an explanation. After the meeting, I asked him to submit a letter providing the same explanation for the misbehavior. I have that letter with his signature as proof of the incident wherein he has apologized. Also, he has accepted the termination letter, where it is clearly mentioned that the termination is based on disciplinary grounds. Though his lawyer claims that the company needs to pay him one month's extra salary.

Impact of Missing Charge-Sheet or Show-Cause Notice

Also, I do not have a charge-sheet or a show-cause notice. Will this affect the situation? In a case where I do have two official documents supporting 'termination due to misconduct,' do I still need to pay one month's extra salary?

Defining 'Reasonable Opportunity' in Employee Termination

The issue at hand is that we cannot clearly define what constitutes a 'reasonable opportunity to defend the charges.' Hence, if the employee can demonstrate that he was not provided with adequate opportunity but his signature was obtained by force, the situation may take a different turn, leading the court to potentially order reinstatement. In light of this, it may be advisable to offer him one month's pay and release him based on his resignation.

Regards,
Madhu.T.K