How to Handle Termination of Irregular Field Employees and Prepare for Labor Court Challenges

Good evening, we have employees working in the field on a part-time or piece-rate basis. Please guide us on the process of disciplinary action to be taken against employees who are not regular and have been absconding from their duties. Some employees are approaching the labor court after being terminated.

Termination Process for Irregular Employees

How can we terminate employees who are not regular so that if an employee approaches the labor court, we have the necessary documents to resolve the issue?

Thanks in advance.

Regards,
K. Saikishore

Please tell us how you have been terminating employees so far. What procedure has been adopted? Regarding part-time and piece-rated employees, it is well known that they have a high rate of absenteeism. How are they treated? Have you regularized their services?

It would be appropriate to suggest after more information is available.

Warm regards.

Termination of Piece-Rated Employees

All the employees are working on rolls, issued appointment letters, and designated as "Piece-rated employees." They perform billing services door-to-door in assigned locations.

Case 1: Handling Consumer Complaints

As and when we receive complaints from consumers regarding wrong billing, we hand over the billing machine and terminate the employee.

Case 2: Absenteeism and Absconding

Employees used to be continuously absent and absconding for a few weeks. We treat it as if the employee has left.

After a few months in both cases mentioned above, employees used to approach the Labor Court, stating that they were terminated without notice and not paid wages since they absconded.

Appointment Letter Clause for Reference

[CLOSURE / TERMINATION OF CONTRACT]

This offer of appointment is in view of the contract between A Ltd. and B Ltd. For any reason, if the contract between A Ltd. and B Ltd. gets terminated, your employment will automatically come to an end.

Your services will be terminated without any notice or compensation in lieu of notice if you fail to complete the billing entrusted to you for two consecutive months, fail to achieve the targets from time to time over a period, or if it is found that you have altered/modified/erased/misused the data in the billing process activity.

Your services will automatically be terminated on completion of the term mentioned above.

You will be covered by the Rules and Regulations, including conduct, discipline, administrative orders, and any such other rules or orders of the company that may come into force from time to time.

Your services will be terminated without any notice or payment in lieu of notice for your acts of misconduct or loss of confidence, inefficiencies, disloyalty, commission & omission of your acts that may adversely affect the reputation and business of the company or commission of any act involving moral turpitude.

If for any reason you become incapable of performing the duties assigned to you or in the event of giving false particulars in your application and deliberately not disclosing any information, then in such a case, your employment will be terminated without any notice and compensation thereof.

In the event of termination or resignation, you shall hand over all the documents and papers, keys, and other property of the Company that may be in your custody, care, or charge to your immediate superior and obtain a clearance certificate from him.

Are the above clauses suitable for termination without notice? Employees have filed suit under ID Act Sec 25-F, 25-G, 25-H. Please guide.

Regards,
K. SAIKISHORE

Fixed-Term Contract (FTC) Employment and Termination

This is a case of fixed-term contract (FTC) employment for a specific work only. An FTC can be terminated upon the completion of the work for which the employee is engaged or after a fixed period, such as one year or two years, which is predetermined at the time of starting the contract. In your case, since there is no fixed period mentioned but the employee was hired for a particular job, they are expected to be terminated without notice upon completion of the job for which they were hired. However, when we state that your service will be terminated when the contract between the company and an outsider/vendor ends, there is uncertainty regarding service, which will not be permitted by the court. Failure to achieve targets is also improper and will not stand before any court.

Secondly, even if the court accepts that termination clause, the termination should have been on the grounds of the termination of the contract with company B and not on the grounds of any misconduct or habitual absenteeism. If the employee on a fixed-term contract has been non-performing or is a habitual absentee, then you should have given them adequate opportunities to improve and/or conducted a domestic inquiry before terminating their service. Failure to follow the procedures is inexcusable, even if your contract of employment with the employee provides that 'without notice' one can be fired. This includes any misconduct, moral turpitude, misappropriation of cash, or anything which a reasonable person should not do. Therefore, your act of terminating the employee without offering them an opportunity to be heard seems to be illegal and against the law.

Section 25F states that one month's notice is required to be served on the employee to be terminated or retrenched. Since you have not served notice or paid one month's pay in lieu of notice and paid retrenchment compensation at the rate of 15 days' pay for every completed year of service, the termination is illegal. Section 25G states that it should be the last employed person in the same category who should be retrenched first, and the retrenched employee shall be given first priority when a vacancy arises.

Probation and Termination

If the employee has been on probation, you could have terminated the service WITHOUT showing or assigning any reason for termination. Since you have already shown the reason for termination as absenteeism, you cannot defend by saying that termination was during the probation period. Moreover, there is no such probation clause in the appointment order.

In any case, the matter will take another three to five years to settle. If they had sent the matter for conciliation, at least a settlement could be done by paying compensation as per the ID Act.

Piece rate is only a wage arrangement and has nothing to do with a dispute.

Regards,
Madhu.T.K

It looks like you need to modify your terms of employment. The existing one talks only of termination on account of termination of the agreement with the client. You need to include the condition regarding absence and mistakes as grounds for termination instead.

Please check if these are already stated in your standing orders; otherwise, you may introduce these terms in the standing orders. Additionally, prepare a standard operating process on termination, which should include notices to the employee and the opportunity for them to be heard.

You cannot or should not terminate an employee for a single mistake (unless you can show the impact was really high). You should have a fair mechanism for that as well.

Regards

Termination of Fixed-Term Workmen

The termination of a workman on a fixed term can escape retrenchment only if the termination is a result of the non-renewal of the contract on its expiry or under a stipulation in that behalf contained in the contract. If the termination is for misconduct, rules or principles of natural justice will apply to fixed-term contracts also, like regular workmen. All other terminations of fixed-term employees will attract Section 25F/25N of the ID Act.

Regards,
Varghese Mathew
[Phone Number Removed For Privacy Reasons]

Procedure for Terminating Employees on Grounds of Unauthorized Absenteeism

There is a laid-down procedure for terminating an employee on the grounds of continued unauthorized absenteeism. The procedure can be found in the Industrial Employment (Standing Orders) Act. Even piece-rated employees are considered regular employees if they are given regular appointment orders with clear terms and conditions. You are not supposed to employ any person on temporary roles beyond 90 days.

In case you wish to terminate the services of an employee on habitual unauthorized absenteeism grounds as stipulated in the certified standing orders of your company (or model standing orders), he should first be served with a show-cause notice (charge sheet) to obtain his written explanation. Based on his explanation, if he accepts his guilt, he should be warned in writing. Alternatively, a domestic inquiry has to be conducted on the charges leveled against him, and based on the findings of the inquiry, he should be warned.

After such disciplinary procedures have been conducted and the employee has been warned 3 to 4 times, he should be suspended for similar misconduct again for 2 to 3 times. Only after giving such a long opportunity to an employee, the final action of terminating the services of an employee can be taken, as termination or dismissal of an employee's services is almost akin to a death penalty. You need to build up a case like this against any employee before he is terminated from the services of the company in case of habitual unauthorized absence.

I hope you understand the procedure. When you do not follow this procedure, the labor court is likely to recommend reinstatement of the employee, which goes against the establishment.

Regards,
A.V. RAMA JOGA RAO