Dear Usha,
Broadly speaking termination of the services of an employee can be resorted to by any one of the following three kinds viz., (1) Discharge (2) Dismissal and (3) Retrenchment.
1)DISCHARGE: This can be further classified as (a) Discharge Simpliciter and (b) Discharge on the ground of continued ill health.Discharge simpliciter is commomnly known as the termination of the services of an employee by the employer by giving notice or paying wages in lieu there of as required under the contract of employment.Since it is not punitive in character and no stigma attached to it, the discharged employee is entitled to all service benefits.However,it is not an absolute right enjoined upon an employer by the contract of employment and the court can set aside the order of discharge simpliciter if found mala fide.Therefore, exercise of this power should be just, fair and reasonable and should not be arbitrary. For example the services of a probationer can be terminated on the ground of not satisfactory performance within the probation period, if so mentioned in the contract of employment or in the Standing Orders.In any other case it has been held ultravires of the constitution by various courts.Discharge on the ground of continued ill health is purely on medical grounds n the so discharged employee is entitled to all service benefits.
2)DISMISSAL normally takes place on disciplinary grounds based on the omissions or commissions enumerated in the standing orders as misconduct.All the terminal benefits including gratuity at times stand forfeited depending upon the gravity of charges leveled n proved.
3)RETRENCHMENT HAS BEEN DEFINED U/S 2(OO) of the I.D Act,1947 as the termination by the employer of the service of a workman for any reason whatsoever, otherwise than as a punishment inflicted by way of disciplinary action except voluntary retirement, retirement on reaching the age of superannuation termination on a/c of non-renewal of the contract of employment on its expiry n termination on the ground of continued ill health. IN case of retrenchment , the employee is entitled to retrenchment compensation as detailed by Mr.Saikumar in addition to all other terminal benefits.
Regarding the second part of ur question , the answer is no.Depending upon the average no of workmen u employed in the preceding 12 months, u have to obtain prior permission from the appropriate Govt before resorting to retrenchment; if the no of workmen is 100 or above prior permission is mandatory. However, all the retrenched workmen are entitled retrenchment compensation @ 15 days last-drawn wages for every completed year of service. The process of retrenchment has to be according to seniority only n the retrenched employees have preference over re-employment if they so desire. .