How Can I Improve Our Termination Policy? Seeking Practical HR Advice

Request for Guidance on Termination Policy Enhancement

I am working for a real estate company as an HR Manager. We have company policies in place, but my Managing Director has asked me to make some changes to enhance the effectiveness of our termination policy. I have outlined some basic points in the policy. Please provide guidance on effective strategies that can assist me in preparing an improved Termination Policy for our company.

Regards,
Shubha
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Termination Policy Guidelines

Termination policy depends on the employee code of conduct and may be referred to as the employee separation policy. The policy is straightforward, and its content can be summarized in a few lines as follows:

• The management is not satisfied with employee performance and may terminate employment without prior notice during the probation period.
• The management will provide a 1-month notice period when terminating an employee.

You need to create a policy based on the above two points, which constitute the code of conduct. Before terminating an employee, you must give at least three oral warnings and three written warnings.

Regards

Thank you so much for the early reply, which you both have made. I will work on the points as you both have suggested and will definitely let you know the status.

Regards,
Shubha

No company requires a termination policy; termination depends upon the terms and conditions clearly set and mentioned in the appointment letter. Additionally, there is something known as standing instructions that you can draft, but be cautious as all these must adhere to Natural Justice. No company can implement a policy that goes against the natural rights of any employee. Even if something is drafted or accepted by an employee at the time of joining, if it contradicts any law, it is not enforceable.

Termination Policy and Natural Justice

The termination policy that your MD is attempting to draft sounds contradictory to the principles of Natural Justice. Up to this day, India does not officially approve Hire & Fire policies.

Furthermore, I believe that no reputable company requires a policy as you intend to enact. However, every company can create a disciplinary action policy where various actions and punishments for those actions and omissions are outlined. Remember that everything drafted must comply with the provisions of labor laws, and you cannot terminate any employee for anything without giving them a chance to explain or justify their actions/omissions.

God bless you and your company.

Hi Lakshmi,

I have created a separation policy based on the following guidelines:

Termination:
Employers can terminate an employee based on their performance. If the performance is not up to par, we can provide a warning period, and if there is no improvement, termination can occur (similar to how it works in a probation period). In such cases, termination would be with a 1-month notice period or salary in lieu of it. However, if termination is due to gross misconduct, it will be immediate, with all dues cleared, but no notice period or pay would be given.

Resignation:
An employee can submit their resignation with a 1-month notice or salary in lieu of it.

Retirement:
Employees will retire upon reaching the age of 60, with all dues cleared.

I hope this helps in preparing an effective Termination Policy for your company.

Best regards

Termination Policy Suggestions

I suggest you review the company's standing order first; it's the employer's weapon. Then, you should draft the Termination & Resignation policy. Every policy should include the Labor/HR policy and H.S.E. policy—it's mandatory. Without any SOP, the employer can't maintain a better environment. You may also add the misconduct clause in the appointment letter.

The misconduct procedure should be as follows:
1. Verbal warning
2. Minor demerit (writing)
3. Major demerit (writing)
4. Suspension
5. Termination

It should be clearly mentioned that if any assault or fighting is found on company premises, the company will take action such as suspension/termination.

Additionally, mention continuous absence for 8 days without any information. The company needs to cross-check or inform them about the issue.

Resignation Policy Suggestions

The notice period clause should be mentioned in the policy.

Best regards,
Ashish Saini

Termination of Service Based on Misconduct

The termination of service of an employee depends upon their misconduct. Employees must be given three verbal warnings and thereafter three show cause notices along with their responses. If the situation does not improve, then the employee can be terminated with a notice period or pay (if confirmed in service). This procedure shall be followed if they fall under the definition of Workmen as per the Industrial Dispute Act.

Under probation, any employee can be terminated at any given time without any notice. If they do not fall under the definition of Workmen, then a suitable warning or showcause shall be given for their misconduct following natural justice, and they can be separated by giving a notice period or pay.

Regards,
Dhanesh S.