Can My Company Fire Me Without Notice? Seeking Advice on Sudden Termination

Hi, I am working for a software company for the past 1 year and 6 months. After working for this duration, my company informed me that my performance is not satisfactory, and they are terminating my employment without any notice period. The probation period was the first 3 months, which I successfully completed.

Request for Advice on Employment Termination

Please advise on the following:

1. Does the company have the right to terminate an employee without any reason or notice period?
2. If not, can I take legal action against the company?

Thank you.

Regards,

Please go through your offer letter and confirmation letter to check what notice period has been mentioned after the completion of the probation period. It's unethical to terminate someone for the sake of experience after 1.6 years. They should have informed you or provided you with a Performance Improvement Plan letter or a warning letter. Discuss this with your HR and explore alternative options because this termination could tarnish your 1.6 years of good experience.

Be positive, confident, and face the situation bravely.

All the best.

Thank you for your answer. These are the clauses returned in my appointment letter regarding termination. Can you please check this? I have asked for compensation for an extra 2 months, but they are refusing to pay me.

Termination Policies

Your employment with XCOMPANY is at will and may be terminated at any point in time if you are found to be unsuitable at the evaluation of XCOMPANY Management or for any reasons whatsoever, with a 2 (two)-month clear notice in writing.

Similarly, if you resign, you are required to serve either a 2-month clear notice in writing or pay an amount equal to your 2 months' salary in lieu. No notice period and notice pay is applicable if your performance is not found satisfactory after the training period or if you violated company policies.

After the confirmation of your employment, the notice of termination of employment will be a 2-month notice in writing or 2 months' salary in lieu of notice.

Notwithstanding the aforementioned, the company shall be entitled to terminate your employment without notice, indemnities, and compensation in any of the following events or any of the company's policies, including but not limited to below:

1. If you are, in the opinion of the company, guilty of dishonesty, serious misconduct, or negligence in the performance of duties.

2. If you have been found to have committed a serious breach or continual material breach of any of your duties or obligations.

3. If you are found to have made illegal monetary profit or received any gratuities or other rewards, in cash or in kind, out of any of the company's affairs or any of its subsidiaries or related companies.

4. Material and monetary loss to the company.

5. If you are found to have violated company policies.

Steps to Address Unjust Termination

Then ask for a notice period or 2 months' salary. Simple. If they refuse, raise the query again.

Firstly, talk to your HR both verbally and by email. Keep all emails backed up so you can use them as evidence in the future.

I have talked to the HR and CEO of the company, but they are refusing to pay compensation. They have blocked my company email ID. I just have the company ID card and appointment letter. They have deducted the PF amount from my salary, but they did not give me the PF number.

No, don't send any resignation mail. You can send an email from your personal ID mentioning the injustice done to you. Also, outline all the details sequentially on how they have forced you to leave the organization involuntarily and without any clarification or intimation. Additionally, state that you will not resign until they pay you for 2 months' salary and provide a relieving letter. Sending this type of email will definitely be beneficial for you.

Legal Requirements for Employee Termination Compensation

Is there any law mandating the payment of an additional 2 months by management? Is there any labor act that requires such compensation to be paid to employees?

If they have mentioned in the offer letter that you are being terminated due to performance issues, then they have to pay. In case you have breached trust, engaged in misconduct, or committed major illegal activities, they are not liable to pay. If they have cited performance issues as the reason for your termination, it is mandatory to receive salary or notice period as specified in the offer letter and appointment letter. These documents are now legal documents that can be used as proof and support.

Regards

Complex Terms of Appointment

The terms of your appointment are quite complex and perhaps unnecessarily so. (I hope the mistakes in the letter are typing errors on your part.) They have a notice period of 2 months, but only after you are confirmed (you have a letter that your probation is over and confirmed with the company). They can still terminate without notice for a number of reasons listed.

Termination on Non-Performance

Termination on account of non-performance without notice is a rare clause. I am not sure if it will stand scrutiny in court. However, if it does, then of course, the management must have performance parameters and reasons why they consider you have failed. Simply because you have worked for 1.6 years is not proof that your performance was good. If you joined as a fresher, they would not consider you as productive for the first 6 months anyway. Thereafter, they would try to get you to fall in line with company standards. If you fail, then they will give up somewhere after a year, which seems to fit the pattern here.

I don't know whether your supervisor has been prompting you to improve, correct mistakes, or meet coding standards, etc. Furthermore, you have not said whether they have given anything in writing on that front or whether it was all oral. If there is evidence that they were happy with the work.

Legal Actions and Considerations

Now, whether they were fair or unfair is of little consequence in the larger picture of your career.

1. If evidence is there, you can approach a labor officer and file a complaint.
2. If evidence is in your official email, it's tougher but can still be done (a labor officer can ask for a copy of emails in your account).
3. If no evidence exists, you can still complain, and then the company will have to give their side of the story and evidence (which they can easily create).

More importantly, can you spend time fighting the company? Equally important, do you want to fight, considering that any job you take up may do a reference check with the employer?

At best, you are going to get 2 months' salary. Are you willing to accept a "Termination" letter in exchange? That is considered a major negative by most HR Departments.

Considering all that, it would make sense to resign and get a clean exit. However, do negotiate with them to see if they will give you part of the notice pay. Which path to follow you need to decide depending on various circumstances and weighing probabilities that we cannot do for you as we will not have the full details. However, I would not favor giving a resignation letter without being clear that the company will give you a clean exit (definitely offer to complete a 2-month notice period).

First Term of Employment

There are three aspects in this case. As mentioned above, the probation was 3 months; what happened after that? Was your probation extended, were you confirmed, or did the employer not provide anything in writing? If your services were confirmed, the confirmation letter should specify the notice period. If nothing was given in writing, then your services remain on probation.

Shops & Establishments Act

The second issue is whether you are covered under the Shops & Establishments Act, which you most probably are. Most of the Shops & Establishments Acts provide for a clause on this issue. For example, the Delhi Shops & Establishments Act states that the employer has to give one month's notice after three months of service. It does not matter whether your employment is probationary, temporary, or permanent; the notice is mandatory.

Statutory Provisions

All statutory provisions give benefits on completion of a certain length of service and do not depend on the classification as probationary, temporary, permanent, etc.

Misconduct and Performance Issues

It is correct that if you are charged with serious misconduct, you can be dismissed (not terminated) for such misconduct. Before it is done, the charge has to be inquired into and proved in accordance with the principles of natural justice. Yours is not a case of misconduct. It is a case where the company is addressing your performance.

Industrial Disputes Act

As per the Industrial Disputes Act, termination of service for reasons other than misconduct, ill health, and others mentioned therein amounts to retrenchment. Your case will squarely fall as retrenchment as efficiency, etc., are not part of the exception. The employer, after completion of one year's service, is required to give one month's notice plus half month's salary as compensation for each year of service.

This is the law.

Some of my colleagues are talking about the practice in their company. Remember, any practice which is less beneficial than the legal provisions is not legally valid. It does not apply.

Just to add on above, setting performance benchmarks is different from the employee perspective and the employer perspective, but it does not necessarily mean termination. Was any improvement plan devised for you or any opportunity given to you? What was the result?

Legality of Termination

As far as the legality of termination is concerned, it has already been pointed out by a fellow member in the above post that your termination could amount to retrenchment, which is grounded in law. Before retrenchment, there are certain procedural aspects that need to be followed by the employer; otherwise, it is always subject to judicial scrutiny and fails the test of fairness before the labor court.

The court can order reinstatement or ask for the payment of compensation in lieu of reinstatement. In recent years, the trend in court decisions has shifted towards emphasizing suitable compensation payments rather than reinstatement.

Steps to Take

You need to consult a lawyer and can approach a labor and conciliation officer with a complaint/demand notice. Even before filing a complaint, you can send a demand notice to your employer stating all facts duly drafted by a lawyer, incorporating all relevant legal provisions.

Furthermore, you can directly file an application before the labor court; there is no bar to this.

Termination Due to Non-Performance

In your offer letter, it's mentioned that if termination occurs because of non-performance, you will not receive any pay or notice. Hence, you cannot take action if your HR states that they are terminating you due to non-performance. If they are asking for your resignation, please provide it so that the company can issue you the appropriate experience letter. If you do not resign, the company may issue you a termination letter.

Regarding PF Deductions

If PF deductions have been made, they should provide you with the PF account number. You can then check with the PF department about the status of your PF account.

Have a professional discussion with HR and your reporting manager for a smooth exit.

Termination Clauses and Legal Provisions

The clause stating that termination can be done without notice or pay is invalid since it is in contravention of legal provisions in the Shops & Estt Act and the Industrial Disputes Act.

No employer can have clauses that contravene the statutory provisions. If the employer has such a clause, it is invalid and is replaced by the provisions of the law. The advice that the employer can terminate after a long period of non-performance without notice or pay is not legally valid and is not correct.

Legal Protections Against Unjust Termination

Please tell us which section of the Shop and Establishment Act prevents an employer from terminating an employee without reason.

I did not say "without reason"; I said "without notice". Please read Section 30 of the Delhi Shops & Establishment Act. I am quoting the section below:

"No employer shall dispense with the services of an employee who has been in continuous employment for not less than three months, without giving such person at least one month's notice in writing or wages in lieu of such notice. PROVIDED that such notice shall not be necessary where services of such employee have been dispensed with for misconduct, after giving him an opportunity to explain the charge or charges against him in writing."

There are similar sections with different periods in almost all the Shops & Establishment Acts of different states.