Can You Legally Terminate an IT Employee for Poor Performance? Seeking Advice on Compliance Steps

Hi members,

I would like to understand from you the legal position of terminating an employee on the basis of performance in an IT/ITES organization. Can a person who is in the bottom 5% of the employee population be terminated on the grounds of non-performance? If so, what necessary steps would have to be taken to be legally compliant?

Looking forward to your responses... thanks.

The person who has offered a job has the right to take it back, whether on the basis of his performance or other. The employer is the judge of one's performance. The only thing to be considered is the time span within which the decision to terminate the service is taken. Under normal circumstances, an employer is expected to review the performance of an employee within a year. If he finds that the employee is no longer required, he can send the employee out by giving them reasonable time to find alternative employment. If the employee comes under the purview of the Industrial Disputes Act (IT sector employees also come under the ID Act), they shall be paid 15 days' salary as retrenchment compensation for the one year worked.

Termination of employment on the ground of non-performance after many years of service is not justifiable because an employer cannot take such a long period to understand whether the employee in question is fit for the position or not. If an employer does so, it will be deemed as victimization, which is against the laws of natural justice. Here also, there is nothing wrong provided the employee retrenched is given compensation at the rate of 15 days' salary for every completed year of service and is given notice (at least one month) of their retrenchment or payment in lieu of such notice.

Regards,

Madhu.T.K