Is an Employee Entitled to Extra Pay After Termination? Seeking Quick Advice

I would like to know if an employee is being terminated, is he eligible for an extra month's pay. Please do advise at the earliest.

Simmi

Hi Pallavi,

It depends on the policies of the company. Generally, at the time of appointing a candidate, companies mention in their appointment letter to give a notice of one month before leaving the company. This is applicable on both sides. Secondly, if the employee resigns without giving this notice, he is asked to give his one month's salary. If the company terminates the employee without giving this notice, then the employer is liable to give one month's salary to the employee.

DIPS

Pallavi,

There is a contract of employment between the employees and the employer (generally seen as an "appointment letter"). To answer your question, one has to examine if the contract has any provisions in this regard and act accordingly.

In an alternate scenario, the applicable provisions from the Industrial Disputes Act and the Industrial Employment (Standing Orders) Act need to be verified.

In another scenario, if the termination is a result of disciplinary action under the standing orders (referred to above), there could be termination without notice or salary in lieu of notice.

Where does your situation fit?

Regards,
Samvedan
September 23, 2005

Hi,

I have another query. If the termination is based on the violation of the Standing Order by the employee mentioned explicitly in the appointment letter, then in such a case, can the notice period be waived off?

Regards,
Anuradha Zingade

Anuradha,

This is an interesting question. While the Appointment Letter does have a sanctity of law between the employer and the employee, any partial rights provided in the said appointment letter could get struck down at a later stage (like in a court case, if the matter of termination does reach there!)

Also, the termination itself must be justified on the criterion of applicable law and principles of natural justice! In such a case, yes, termination without notice or compensation is possible!

Caution: If the Appointment Letter gives such a right as you claim, only to one party and not to the other, then it may not stand the test of law!

Is the matter clear?

Regards,
Samvedan
September 24, 2005

I feel that if a company's Employee Relations Team is good, i.e., the company is more PEOPLE FOCUSED than PROCESS FOCUSED, then employees should receive an extra month's pay.

Regards,
scare_crow

Hi Samvedan,

Thank you very much. I agree that, as far as possible, the separation should be amicable because this ex-employee could act as a brand ambassador and recommend it as a place to work.

Regards,
Anuradha

There can be no termination based on any violation of standing order WITHOUT holding an inquiry and affording an opportunity to the employee as to why disciplinary action should not be taken against him.

Termination is possible only in terms of a contractual appointment when the employee is recruited for a specific period and the period of service comes to an end. This is known as non-renewal of the contract. The employee is entitled to pay for the period he was employed in the company.

Please be very clear that if you make any allegation or charge an employee for any misconduct mentioned in the standing orders, you must issue a charge-sheet and hold an inquiry. If the charges are established, the services can be terminated by way of dismissal or discharge depending upon the gravity of the misconduct.

CYRIL