Can a Company Terminate an Employee for Medical Leaves Despite Labor Laws? Let's Discuss

One of my known company's HR policies on termination defines that if an employee takes more leaves:

Termination Policy Steps

1st Step / Action: He/She would be given a warning letter.

2nd Step / Action: Even after issuing a warning letter, if he/she takes more leaves, he can be terminated. With this policy, the company has recently terminated a 10-year experienced employee just for taking more leaves.

Case Details

For your information: The employee took 50 leaves in the last 6 months purely on medical grounds, and this is not a continuous leave. He had lots of LOPs as his available leaves exhausted. For your information, all leaves are informed leaves.

Question on Policy and Labor Laws

Does this policy supersede labor laws? We felt that this is a harsh decision. Please let me know your thoughts on this.

No internal policy of any organization supersedes the labor law. The company policy is for internal governance and should generally be framed in coherence with labor laws. Considering the fact that these are informed leaves, the management's decision looks harsh.

Regards,
Bishwajeet

You have not mentioned whether your company has certified standing orders or is merely governed by the HR policy. Has your company taken such a decision in the past for any other employee? What was the designation of the person who has been terminated? (Worker, Supervisor, Manager?)

Generally, companies do not take such an extreme step when the employee has a decade of experience behind him. In my opinion, the termination is not because he has availed leave but is probably due to some other reason which I am not able to decipher as an outsider. A man with about 10 years of experience, in my opinion, must at least have 20 - 30 days of leave to his credit during this calendar year. As you have not indicated the number of LOPs, it appears he has been availing leave frequently in the past few years too. It could be on medical grounds too, which is not clear.

You can deliberate confidentially amongst yourselves and find out the real reason. On some occasions, the company loses trust and faith in the employee on moral grounds and tends to look for an opportunity to sever the employer-employee relationship for some trivial reason. Professionally managed companies tend to initiate action for the respective misdeeds of the employee and do not make decisions like this, especially when the employee has availed leave on medical grounds and has produced a medical certificate to that effect. The genuineness of the medical certificate also matters (whether he was really sick?). In some instances, we have observed that employees produce fake medical certificates for availing unauthorized leave or for overstaying beyond the days of authorized leave.

Termination for availing leave on medical grounds, on the face of it, looks harsh.

Regards,
M.V. KANNAN

Hi Kannan, you are spot on! Let me give you more clear details:

- The company doesn't have standing orders.
- This is the first time in 13 years of the company's experience.
- Designation: Asst. Manager

Leave Details:

- Apr - 2 days
- May - 6 days
- Jun - 8 days
- Jul - 15 days
- Aug - 3 days
- Sep - 10 days
- Oct - 13 days
- Nov - 20 days

Regards,

The very fact that you mention "Leave" for the number of days the employee was absent from work implies that his absence was authorized. Therefore, any disciplinary action would be ill-advised and most inappropriate. Also, you cannot have HR policies that are in violation of statutory provisions. The law will always prevail. The three-step policy will not stand the test of the law if someone challenges his termination in a court of law.

Best Wishes,
Vasant Nair

Compliance with Labor Laws in HR Policies

Any HR policies of the organization must conform to the provisions of labor laws.

Show Cause Notice Before Termination

The case projected by you refers to an Assistant Manager. Before terminating his services, a 'Show Cause Notice' should have been given, which provides the employee with an opportunity to defend his case and justify his action in repeatedly taking leave for long durations (especially during the months of September to November).

In case his leave was duly approved by the sanctioning authority, it ceases to be a case of 'Absent without Leave'. But if he was truly absent without leave, it becomes a disciplinary case. The company policy on the management of disciplinary cases comes into focus. In all fairness to the employee, a show cause notice must be served, specifying the date by which his explanation should be submitted, failing which his services could be terminated. Any decision taken by the management thereafter becomes procedurally and perhaps legally justified.

Compassion and Employee Loyalty

There is no harm in being compassionate if the employee has served the organization for 10 years, is not a habitual defaulter, has been committed to his job, but was compelled by circumstances to be absent without leave in the 11th year of his service. It is to be remembered that pardoning someone is more difficult than punishing him, and this is the key to win the loyalty of people in any organization.

I hope a person at the Assistant Manager level, having 10 years of experience in the company, must have been holding a responsible position by now. In such a situation, taking frequent leave may hinder day-to-day decision-making, meeting production targets, etc.

But, if this leave is sanctioned/approved, then prima facie, while submitting the application itself, it should have been conveyed to the individual. You conveyed that he is "not well" or not in good health. Management also faces difficulty in knowing whether this person is going to be productive or how long his continued absence is going to be. In a business environment, no one is indispensable, whether you are an experienced person or have recently joined. It must be a system-driven process.

Therefore, the management needs to make a decision on this. It seems like the management is no longer able to tolerate his absence (even if it's authorized). If a person is facing "continued ill health," one needs to take a closer look at this. Yes, if someone loses their job suddenly, they need to have some means to survive; perhaps management could assist in finding a job elsewhere or placing them in a department where their presence may not be as crucial. This arrangement can continue until the person recuperates. Even then, if the individual has not returned to normal health, the management can make a decision.

I hope your management has exhausted all options and finally opted for this. However, terminating someone's service (possibly due to ill health) should not always be considered illegal.

Regards,
V. Balaji

Before we discuss the matter in more detail, I would like to know the reaction of the terminated employee. It could very well be possible that the person concerned was informed about the action the senior management would take if he continued with the leave pattern. Further, as other members have pointed out, company policies cannot override the law. Try to find out internally the root cause.

I assume that the person terminated did not fall under the definition of a workman, and therefore challenging the action of the company may not be an easy task.

Regards,
Preetam Deshpande

Dear Atom Leaf, From the details furnished by you, I understand that the affected party is close to you. On his behalf, you are asking these questions. Okay. Any company will not terminate any employee without valid reasons. If absence from work is the sole cause, then the company would thoroughly investigate the reasons for the employee's absence before making any decisions. You have not mentioned which company it is—whether it is an MNC, a small firm, or a family-managed enterprise, etc. Additionally, you must note that frequent absence from work also hampers the company's day-to-day activities. You are correct in pointing out that termination is a harsh decision compared to demotion, withholding incentives, or placing a black mark in his personal file. If the aggrieved employee takes the matter to court, usually a labor court (provided he is not working in a managerial position), he may receive some justice, although this is not guaranteed.

Best Regards,

To continue further, Mr. Atom, you have mentioned that the leave of absence includes all informed leaves. Could you please clarify whether this information is approved and supported by relevant documents like a Medical Certificate, etc.?

Regards

To continue further, Mr. Atom Leaf, you have mentioned that the leave of absence includes all informed leaves. Whether the information is approved and supported by relevant documents like a Medical Certificate, etc., please clarify.

Hi, it appears that the concerned employee is an executive and not covered under the standing order. The management's decision to terminate him is definitely a harsh one. Since you have informed that no such action on any employee has taken place earlier, such action may constitute 'discrimination' as per the constitution. The employee can file a writ in a civil court based on Article 14 of the constitution (but not in any labor court as he does not seem to be a workman covered under the ID Act).

Regards,
Mihir

Your first query is answered: laws cannot be bypassed through organizational policies. Next, it seems that the period of absence described by you over the course of one year intermittently, against the medical certificate, seems to have been sanctioned. If so, there is no case for any action against the officer. Even if the management is suspicious about the genuineness of the certificates submitted by the officer from time to time, it can appoint a Medical Board to review them and await the report before taking any action accordingly.

In the given situation, no action is justified against the person concerned. Should he choose to take legal recourse in this regard, the management shall stand cornered facing a legally supported employee and potential embarrassment at the hands of others. If you are in a position to advise the management, you may do so categorically.

Regards,
S.K. Johri

Termination Without Due Process: A Case Study

The organization in this case has terminated an employee who worked with them for ten years without following normal procedures. They have not even counseled him to improve his attendance. The act is inhuman. What would be the fate of his wife, children, and his dependents?

In the critical time of need, instead of getting help from his organization, he has received a termination order!

In a standard reputed organization, the company goes out of the way in providing medical facilities to its employees, much beyond the law. By this, I presume this may not be a company caring for its employees. It is not only the exposure physically to harmful working conditions or nature; the sickness may also be due to a lot of harassment, discrimination, depression, mental tensions, diabetes, BP, etc. (many employees have committed suicide).

It can be said beyond doubt that this organization does not have any HR policy, approved standing order, nor any policy to take care of supervisory and managerial staff. These organizations expect a great sense of belonging from their employees, but the organization does not reciprocate the same.

Therefore, the said employee, who is an Asst. Mgr., not covered under the ID act, can approach a good lawyer and file a writ in civil court, and win the case.

Regards,
S N Rao

Thank you for your valuable response! After receiving the termination letter, he was very furious and planned to deal with this legally. However, as one of you mentioned, in a world of the middle class and with many commitments, he dropped that idea. Instead, he approached the HR manager and inquired about the reason for this harsh decision. They stated that the decision was due to an attitude problem, with taking more leaves being termed as such, and day-to-day activities being affected as a result. The company had decided to appoint a new manager in his place.

After a long discussion and receiving assurances from the HR manager that the issue would not recur, the management reached out to him within a week with two options:

Option 1: Resignation

Leave the organization by submitting a resignation letter and receive all necessary documents as part of a normal relieving process.

Option 2: Continued Employment with Conditions

Continue the job with the condition that the salary will be reduced to 50% of the current pay for the next 3 months. The salary will be reverted back to the original amount if performance is satisfactory and no leaves are permitted during that period. Additionally, the designation will be downgraded, and he will have to report to a new assistant manager. The designation will not be returned to its original status after the 3 months.

This is a Software Development (Pvt Limited) company with 200 employees.

Dear all,

No human being "worth his salt" would accept option 2. Is this an option? An employee with dignity and pride would never accept option 2. If poverty, diseases, unemployment, etc., force him not to leave the job, then only he will be constrained to accept option 2 by sacrificing his ego. It is a management trick to force him to accept option 1. This will set a bad example for the other 200 employees of the company.

No doubt this is a "Software Development" company which is not under the Factory Act or other acts protecting employees. Can all of you recall during Satyam's case, trade unions did mention that "Software Industries" should have organized trade unions to safeguard the employees' interests.

Regards,
S N Rao

Mr. Rao, you forgot one thing. You are right in your own way. But consider the situation of being at home without a job, salary, loan burdens, etc. At least the organization is humane in some way to consider his reemployment without completely shutting the doors for him forever. Maybe if he is really worth his salt, he should not fight with the organization; instead, he should seek employment elsewhere.

Cheers, have a great day.

Dear Murdhar,

You are right in one way, but it amounts to the organization exploiting the situational weakness of the employee. Especially when they are demoting him with 50% lower wages, I don't call this "organization is humane."

By this, the organization's attitude in treating experienced employees is not good. It is better he gets transferred (without reducing wages, but not paying bonuses, ex-gratia, incentives, etc.) to some other department where his dependency is not there. Give his immediate subordinate "acting allowance" for his position for 3 months.

Organizations should be "magnanimous" in setting an example of their employee relations. Give him a chance, say three months, to show improvement. If he doesn't improve, terminate him (let him give this in writing). If he improves, reinstate him. Why lose a 10-year trained employee?

Reducing wages and demotion amounts to "humiliation." A new employee from the market with 10 years of experience would not come in the same wage structure.

Regards,
S N Rao

What you say is idealistic, not practical in this situation where the company itself has not taken into consideration his years of service to the organization. Can what you say be practical in this situation?

I once again say that having done this for so long, it is better for the concerned employee to seek greener pastures elsewhere; otherwise, his career and work life will become miserable.

Best regards,

Dear Murdhar, I have expressed the same idea as you, but in a different manner. In short, the organization gives him three months' time to leave without losing its image in front of employees. The organization will be seen as magnanimous, and at the same time, it removes the person in a diplomatic way, encouraging him to leave the company voluntarily. If he improves, well and good. Such actions are practical since I have handled similar situations.

Regards,
S N Rao

I would suggest that the management considers a third option: provide three months' notice pay and relieve him from his responsibilities (let him go). This will offer him time to search for a new job and also serve as a lesson regarding taking unauthorized leave in his future employment. This suggestion is based on his 10 years of service to the company.

I believe that the perceived attitude of the employee (from the management's perspective) did not develop overnight, and the management should have sensed it at least a few years ago. Sometimes, management lacks the resolve to act decisively initially and allows issues to escalate until they become unmanageable. Another reason could be that the management failed to seek a replacement for this employee, thus delaying and tolerating the so-called attitude over the years. They should have provided warnings to the employee through counseling and not rushed into decisions. However, now that the relationship is strained, the best approach is to facilitate the exit process smoothly rather than harshly.

When doctors aim to save the body from gangrene, they amputate the affected parts without causing unnecessary pain. Similarly, organizations should ensure that the exit process is seamless and free from unnecessary complications.

If other employees learn about this exit, they will see that the management has been considerate by offering three months' notice pay while also demonstrating zero tolerance for indiscipline.

Regards,
M.V. Kannan

Great comments. Thank you very much for your posts. The employee quit the company. I would like to share my comments:

- The issue is with both the employee and employer (50:50).
- The employee didn't even bother to inform the supervisor about the extension of leaves in emergency situations (personal and family health issues); hence, he faced the consequences, which had a significant impact on him.
- Why didn't the employer remind the employee periodically (e.g., monthly or every 3 months)?
- The company should have reconsidered its strict decision, but ultimately, who bore the brunt?

There are always different opinions on any topic.

Thanks,
Atomleaf