Legal Consequences Of Terminating An Employee

Hi Neethu,

We have an employee who has had some issues with the management and wants to leave the company. Could there be any legal consequences if the management decides to terminate the employee, without taking into account this resignation?

Regards,
Neethu

Hi Friends,

What I feel is that when you hire any employee as an employer, there is an employment contract. Under any contract, the termination is by notice from either side. You can also terminate the contract on a breach of any terms and conditions of the contract. Going by this, I don't find any problem if you give prior notice to your employee and terminate the contract.

Experts can give their views and enlighten us.

Regards,

CS Mukesh Tank

Hi Neethu,

Definitely, management may face some legal consequences for the same because termination also leads to legal complications for the company. So, please think before doing the same.

Regards,

Hi friend,

I also agree with Bhagwan_07, so think before you take any action.

Regards,
Virendra

Hello Neethu,

You haven't mentioned what those "some issues with the management" were. Your next course of action would depend A LOT on those issues & the reasons thereof. If they were differences of opinions, then the company wouldn't be right in termination just because they have the 'power' to do so. If the 'issues' were related to indiscipline, insubordination, theft & any such causes, first of all, you need to be clear if YOUR DEFINITION of those terms is standard or something that suits your company alone [such things do happen frequently].

In short, go that way [of terminating him] ONLY AS THE LAST RESORT. In all such situations, Newton's Law applies: every action has an equal & opposite reaction—whether 'equal' or not under such situations, I am not so sure, but I won't be surprised if it does. In a lighter vein, if your Company's Legal Advisor doesn't have a lot of work to do & you want to create some work for him/her [after all, he/she handles all the court activities & you must be paying some retainer fees], then please go ahead by terminating the employee.

Regards,
TS

Dear Friend,

In cases where an employee falls under the definition of a worker under the ID Act, the procedure as laid down under the Standing Orders Act should be followed.

If an employee does not fall under the definition of a worker under the ID Act, then the terms under the termination clause as mentioned in the Appointment Letter should be followed.

Regards

Dear Friends,

I do agree with Mr. Kuljit Pal Singh's view. If the employees are workers coming under the purview of 2-S of the ID Act, you cannot terminate them. You have to follow the procedures systematically as per your standing orders.

In respect of Managerial and supervisory staff - if it is covered under their appointment letter clause as follows: "The Management has the right to terminate your service without assigning any reason with one month's notice or one month's salary in lieu of notice," you can invoke this clause and terminate their service. But, make sure that they are not doing any manual work as that of workmen. They should have some powers such as sanctioning of OT, leave, permission, they are supervising the work of their subordinates, they are decision-makers in their department, etc. Even if they cannot raise a dispute under the ID Act, they can raise the dispute in civil courts for compensation. Recently, we invoked such a clause of the appointment order of our supervisory staff and terminated their service. Recently, the Hon'ble High Court of Karnataka in the case of Vishakantaiah T.N. Vs. The Management of Petro Chemicals Ltd., held that the supervisor cannot be termed as a workman within the definition of Section 2(s) of the ID Act. - ILR 2004 KAR 48.

G.K. Manjunath
Manager-HR

Dear Neethu,

When the employee wants to leave the organization, why do you want to terminate his/her services? Just ask them to submit their resignation, accept it, and relieve the employee as soon as possible. Yes, if the employee qualifies as a Workman under the ID Act, they may cause some embarrassment to the management.

Best Wishes,
Vasant Nair

Dear,

You said he has put in his "resignation", which means he wants to disassociate himself from your organization, right? You should simply accept and send him off, whatever may be the reason, whether misunderstanding with the boss, indiscipline, etc.

By doing so, you are much safer than terminating him. Once you terminate him, he can approach labor machinery, which will boomerang on you. Even if you want to terminate him due to theft, misappropriation, etc., ask him to submit a resignation. Collect the money (which he had swindled) and make him go. When an employee in our organization did so, we wrote to his own brother and conveyed that we would be approaching the police if the money is not returned. His brother paid the money and settled the issue; we relieved him based on his resignation letter. Therefore, think.

Balaji

Subject: Legal Consequences of Terminating an Employee

Dear friends,

When an employee wishes to leave the organization, why terminate his/her services? Simply request the employee to submit their resignation, accept it, and promptly relieve the employee.

Please note:
If the employee is confirmed in the company, termination is not an option. If the company wishes to terminate the employee, compensation must be provided for the employee. Retrenchment termination will be calculated based on:
1. Salary of the month
2. Bonus
3. Gratuity, if applicable
4. Notice period according to the appointment letter
5. Compensation, which will be calculated as 15 days of basic salary multiplied by the number of completed years.

Thank you.

That's the reason for those employees' misconduct and involvement in other activities that are against the company's interest. Majority of companies used to enforce compulsory resignation and send them away from the company. If they are terminated, then the company has to pay notice pay, retrenchment compensation, leave pay, gratuity, and other eligible benefits as per the terms of the agreement.

If a person is sent on compulsory resignation, we can mention the reason as resignation, and in the conduct column, we can state unsatisfactory on the service certificate/experience certificate/relieving letter, whichever is applicable. The individual will only be paid leave pay, and nothing else needs to be paid to the employee. This approach helps us avoid any legal complications or future litigation.

Dear Friends,

There are some valuable suggestions that have come from this discussion. I have a question here.

"If an employee is not given an appointment letter and has been found to indulge in indiscipline and theft, and the company has issued warning letters, but the employee has not accepted it. Now, if the company terminates the service of this employee and the employee stops coming to work but sends a legal notice, how should the company handle the case in court?"

Thank you.

Dear Mr. Rakesh,

Here, you have given a salary slip. Furthermore, for confirming his employment in your organization, you have also issued a warning letter. That's enough for him to file a case against your organization and to prove that he is an employee of your organization.

Please document all the evidence you have collected against the employee and protect it from tampering by his supporters in your organization. As and when required, you can produce the same in court.

I hope you have conducted some inquiry, and for that, you should have proper documentation in your files.

Dear Friends and fellow members,

First of all let me clarify the situation assuming certain things like the employee has completed 240 days of service in last 12 months and the management is willing to terminate his service due to some reason and above all he fall under the definition of workman..

1. management can terminate the employee by following the course given in the industrial disputes act which has a clear provision of retrenchment of the employee. See below section

"[25F. Conditions precedent to retrenchment of workmen. —No workman employed in any industry who has been in continuous service for not less than one year under an employer shall be retrenched by that employer until—
(a) the workman has been given one month's notice in writing indicating the reasons for retrenchment and the period of notice has expired, or the workman has been paid in lieu of such notice, wages for the period of the notice;
3[***]
(b) the workman has been paid, at the time of retrenchment, compensation which shall be equivalent to fifteen days' average pay 4[for every completed year of continuous service] or any part thereof in excess of six months; and
(c) notice in the prescribed manner is served on the appropriate Government 5[or such authority as may be specified by the appropriate Government by notification in the Official Gazette]]. "

2. if Management wants it can terminate the workman by giving him his applicable dues and retrenchment compensation. but keep in mind and get his sign on the letter saying that he is forgoing his right to get re appointed as per section given below.


2[25H. Re-employment of retrenched workmen. —Where any workmen are retrenched, and the employer proposes to take into his employ any persons, he shall, in such manner as may be prescribed, give an opportunity 3[to the retrenched workmen who are citizens of India to offer themselves for re-employment, and such retrenched workmen] who offer themselves for re-employment shall have preference over other persons.]
Andhra Pradesh. —(a) Renumber section 25H as sub-section (1) thereof and after sub-section (1), as so numbered, insert the following sub-section, namely:—
“(2) Where a closed unit is re-opened the workmen on the roll of the unit immediately before its closure shall be given an opportunity to offer themselves for re-employment in the manner provided in sub-section (1).”


keep this section in mind before reemploying any person and prepare yourself before it make any trouble so to evade such condition get it in written that he is forgoing his right to claim reemployment preference at the position.

3. if he himself wants to leave the organization he will not be entitled to any retrenchment compensation.

4. gratuity and other dues like PF etc if applicable in the case also have to be settled forthwith.

Every thing I wanted to say has already been said by others. Let him resign and go peacefully, as your company is also not comfortable with him. Why do you want to stop his resignation and terminate him? This action would insult him, and he might approach the Labour Court. For termination, you need to follow some procedures before the final notice. If you have not done all that, you will be in trouble as an HR, answering and running behind the Labour Court, and ultimately you will end up paying more to the employee or to the Labour Officer as a bribe (From My experience).

So just accept his resignation or else motivate the guy to resign by demoralizing him (You need to play diplomatically sometimes) by explaining various negativities of continuing with the organization in an informal manner. I hope all together you have got a clear answer from all of us.

Take Care

Sreehariprasad.N

Manager HR

Delhi Heart & Lungs Institute

Hi,

If the employee is resigning of his own accord, it's better that you accept his resignation as per the terms and conditions of appointment and let him go. Do not make it an ego issue. Termination would require the whole process of charge sheeting and holding an inquiry as per the principles of natural justice. Even then, the employee can challenge the management decision in the court of law. So why go into all this when the employee is resigning on his own accord.

Best, Jai.

Hi, if the employee is ready to resign on his own, please advise the management to accept and relieve him immediately.

It can be done if the employment letter states that the employer can terminate the employee before the notice period, or the employee can be paid for the remaining notice period.

Regards,
Sanjeev