Navigating Employee Termination: How to Handle Poor Performance Without Legal Trouble

Hi Everyone, I am working in a software company as an HR Executive. Recently, we have encountered an issue with an employee who is not performing well, and his attitude is poor. Despite several warnings from management, he has shown no improvement. He has been with us for the last 4 years, and his wife is a public prosecutor. The management has ultimately decided to terminate his employment without facing any legal issues.

Seeking Advice on Employee Termination

Can anyone suggest whether termination is the best option, or would relieving him be more appropriate? Kindly provide your input on this matter.

Regards,
Geetha Nirmalkar

Understanding Termination and Notice Periods

A letter of appointment is a contract between the employer and the employee. If either party wishes to terminate the contract, it cannot be continued by the other party. However, the terms and conditions of the contract for separation must be adhered to.

What is the notice period for the employee in question? Please issue a letter discontinuing his services. When you do this, either pay him as per the notice period or let him continue until he completes the notice period.

Separation due to poor performance is quite common. When you issued your earlier notices, you could have included a clause on discontinuation of services at that time.

By the way, why are you getting bogged down because of the profession of the employee's spouse? The spouse's profession and the employee's performance are two unrelated matters.

Thanks,

Dinesh Divekar

Bangalore - 560092

It appears from your statement that he is a regular employee. If his services are confirmed and governed by service rules, standing orders of the company, or appointment order, first, you are supposed to issue him a charge sheet, narrating his poor performance or bad attitude, which constitutes misconduct under service rules/standing orders of the company. After receiving his reply to the charge sheet, if the management is not satisfied with his response, then you need to conduct an inquiry by appointing an inquiry officer from outside to avoid legal complications. If the charges are proven in an inquiry report, then you need to send him a show-cause notice for proposed dismissal or discharge along with the inquiry report. Only after receiving his remarks can you terminate his services for the proven act of misconduct.

On the other hand, if you simply terminate the service of any confirmed employee by invoking the relevant clause in the appointment order, giving one month's notice, or making payment in lieu of notice, sometimes it does not prove trustworthy, as you are leveling severe allegations against this employee, i.e., poor performance/bad attitude, which is supposed to be proven in an inquiry as per the principles of natural justice.

Regards.

I would suggest keeping it simple.

1. Issue a show cause notice from the company without the help of a lawyer. Choose the correct words; it should not resemble a legal notice. Ask for clarification of his behavior in this communication.
2. In response, he will clarify the points in writing.
3. Keep a record of this correspondence.
4. As you mentioned, it is his habit, and he is likely to repeat it. In that case, issue two warning letters with a gap of 15 days to 1 month.
5. Following these steps, you can terminate him, either with the condition to pay or to serve the notice period.

Remember, we are HR professionals, not lawyers, so handle the situation with a balanced approach.

Thanks & Regards

Hi Geetha,

All these processes are hectic and lengthy. Please go through his appointment order to determine the notice period. Based on that, be prepared with a cheque payment (one or two months). Ask his HODs to organize a confidential meeting with him, where they can discuss his inabilities and poor performance record. Ask him to submit his resignation without allowing him to inquire about his contacts, and obtain a supporting letter from his immediate superiors/HODs to support this decision. This will ensure the management's safety and prevent any involvement from the prosecution or labor department in the future. If possible, transfer him to another branch of the company so that he may resign voluntarily.

If the employee does not accept this, you will need to issue a show-cause notice, and the process will be the same as suggested by the members of this forum.

Regards

I agree with Sh. N. V. Rao and Ms. Shweta Verma that one's services can only be terminated in accordance with the terms and conditions of the appointment or as per the conditions envisaged in the contract entered into with the employer. Primarily, one should always keep in mind that no termination is considered legal and valid unless the "Principles of natural justice" are followed. It hardly matters the number of years he is serving with you or whether his wife is a public prosecutor. If he is not a productive worker and not listening to the management, he needs to be terminated, but proper procedure has to be gone through. I do not consider it proper when you say that "management decided to relieve him without any legal issues." You are not the authority to decide which is the legal issue or not. Now you need to watch his reaction to your decision.

I agree with another suggestion given by Sh. N. V. Subba Rao, which is "persuasion" to submit his resignation even if you have to pay him some extra amount, which would have saved the situation. If he was not agreeable to your proposal, then of course you need to take the long course of charging him.

Regards,
BS Kalsi

Termination and Legal Considerations

What Mr. Rao suggests is always correct. Without giving any notice, charge sheet, or holding an inquiry, you cannot terminate an employee who is confirmed. It comes under victimization and goes against the principles of natural justice.

Thanks & Regards,
V R Rao Pulipaka

If you are proposing a legal action by fully complying with laws and regulations, it will be a lengthy process. In such a situation, you may act as per the suggestion given by Mr. Rao. Effect a "forced resignation" instead of termination.

Thanks,

R. K. Nair

I have not understood your below-given quote. Can you please explain the terms "termination" and "relieving"?

This is a fitting case on how to terminate an employee with notice or by persuasion without causing harm to the organization. This is one of the best scenarios to address in terms of performance or attitude, yet relieving the services is crucial for the organization. As Shri Rao pointed out, in both cases, the organization has to make a decision, particularly by the appropriate authorities.

Upon hearing the issue, the employer certainly noticed a bad attitude that is crucial to eliminate from the organization. This bad attitude leads to poor performance, which might have been observed through monitoring work efficiency, thereby prompting the authorities to identify the bad attitude. It is likely that a harsh reality existed, as his performance deteriorated due to his bad attitude.

Labeling the employee prima facie, it becomes evident that the individual's bad attitude is the main reason and threat to his continuation in the organization. Informing him about his recently developed bad attitude, the appropriate authorities should issue a caution notice clearly stating that the reason for continuing employment/service will become a cause, and the organization will not suffer or be harmed due to his attitude, which would impact all other staff/employees. Since no organization can bear the suffering of a single person, this case clearly justifies removing a bad employee; poor performance will subsequently lead to his termination from service. An employee's conduct forms the primary basis of employment, with the rest following suit. The organization must provide a service certificate reflecting good conduct as being seen as unemployable for future employment, as highlighted by Shri Dinesh Divekar; spousal employment and the employee's conduct are two distinct categories that should not be merged.

Best of luck...

Before taking any action, you must first decide whether he is a workman under the ID Act of 1947. If he is a workman, even if you terminate him simpliciter, he will be protected by the ID Act, and he cannot be retrenched without following the last come, first go procedure. Then, even before making any appointment to his post, you have to offer him an appointment. Thus, the only recourse will be to collate evidence against him, hold disciplinary proceedings, and then terminate him. The charges should be very serious. The era of hire and fire is gone. If he is not a workman, then there is no problem. Go by the contract and terminate.

Thanks

Simply do one thing - issue him a warning letter containing the following:

Warning Letter

Mr. XYZ
Dept.
Subject: Warning Letter

Regarding the above subject, Mr. XYZ,

We have given you verbal warnings many times to improve your performance and behavior, but to date, there has been no improvement or change in your behavior. This clearly indicates that you are not taking your seniors or the job seriously. Why should the company not take serious action against you?

Kindly reply in writing within 48 hours of receiving this letter. If you do not respond within the specified time, we will consider that you have accepted the contents of this letter. It is your own responsibility to take action.

Authorized Signatory
ZYX Company

If he does not respond, call him to a meeting and ask for his resignation. If he does not agree, issue a termination letter and provide the settlement check as committed in the appointment letter. Let him go.

Thank you.

Handling Employee Termination: Show Cause Notices and Contractual Terms

Proceedings of a more serious nature will be required to be initiated by giving show cause notices of a precise nature if the delinquent is a workman. Otherwise, if he is governed simply by the Contract Act, go by contractual terms simply to terminate his services and do not give the color of punishment.

Regards

You must have understood by now. Mr. Rao has explained brilliantly. Further to clarify, if the employer (Reporting Boss / HOD / HR) discusses with the employee about his performance and asks him to resign, stating, "We will give you full support in your exit, including your proper FnF, experience letter, and reference check if he gets another job."

Scenarios to Consider

There can be only three scenarios:

1. He understands the situation, agrees to resign, serves the notice period, and looks for a new job alternatively. (If possible, record audio-visual of the talks).

2. He refuses to listen to the first situation. Then comes the warning letter, prepared well in advance, and shown to him stating that this is what he has to receive, and not to ask for any support from our side. Seeing the tough approach of the organization, he might agree to situation 1.

3. He refuses both situations 1 and 2. In this case, a warning letter with his performance for the last two years and the losses because of his non-performance to the organization should be handed over. If no response is received within 48 hours, the organization should issue a termination letter.

If challenged in court by the employee, this video recording will surely help as the organization has given fair chances to the employee, but he is just not ready to accept the wrongdoing.

Hope this helps, Ms. Geeta.

Note: Kindly share what you/your organization did and what was the response of the employee.

Regards,
Abhishek Jain

I feel he will consult his lawyer and deny your allegations in the proposed show cause. Once a warning letter is issued, then management cannot take recourse to other punishments such as termination due to constitutional protection. It is easier to get a divorce than to dismiss an employee through disciplinary proceedings. The court sifts through evidence minutely.

Thanks

Dear Geetha Nirmalkar,

I was wondering whether I lack English skills or if you people have a different understanding of English?

Clarification on Terms

What Shri. Korgaonkar raised was very correct. I also did not understand certain terms like "termination without legal issue" and "relieving him without legal issue." Does this mean management just does not want to initiate any action against the employee, or does it want any such action that will not bring any legal action against management? These words confuse me, at least.

Importance of Performance Records

As an HR person, one must have a proper record of the employee's performance. It seems like many HR people think that the record of performance only means positive achievements. To my surprise, negative or non-performance records are often ignored. Performance means both positive and negative aspects.

You mentioned the employee was working for the last 4 years and his performance is poor. Then you must have adequate negative records of him and the timely actions by management on him. In such a case, you should not have any difficulty in dealing with such an employee and coming to the desired result.

Regards,

What follows after granting him increments every year and other benefits is obvious. If the management is considering adopting the path of disciplinary action, then a foolproof method needs to be resorted to. The query does not answer whether he is a workman. If he is, then resorting to it is essential; otherwise, contractual terms govern the situation.

Understanding the Situation

What I wish to understand from Geetha's post is that they need to address the situation with an underperforming employee who has served for 4 years without any major issues. The concern is that his wife is a public prosecutor (PP). A simple solution could be to "negotiate with him" and offer a settlement. If that doesn't work, what are the alternatives?

Resignation vs. Termination

When it comes to resignation and relieving, the matter concludes there. However, termination requires detailed documentation of his poor performance, meticulously recorded over the years. This documentation is crucial for defense if the matter goes to court. Otherwise, there is a high risk of losing the case. As mentioned by many, he has been serving normally for 4 years, receiving increments like his peers. The question arises: why has he suddenly become a poor performer this year? This needs to be substantiated and defended adequately.

I would suggest that you keep copies of the emails sent as warnings to this employee for your reference. These should be maintained as records in his service file as well. Additionally, please refer to the terms of employment outlined in the Appointment Letter issued to him. You may be required to provide him with notice pay (as per the terms of employment) and settle his dues.

Furthermore, please ensure that you obtain his signature on the No-Dues Clearance form to prevent any potential legal complications.

Regards,
Harpreet

Understanding "Relieve" vs. Termination

The lexicographical meaning of "relieve" is to release a person from duty or a task by taking their place or providing a substitute. It is not much different from the termination of services. However, if by "relieve," you mean persuading them to resign, then of course, you can try the same. The apt quote in such a situation is, "when you part, part as friends."

Now, if they do not want to resign, then find out if they fall under the ID Act. Then follow Sec. 25 F of the Act. If not, follow the terms and conditions of appointment. Always ensure natural justice. Who said that HR practitioners are different from lawyers? They must work in a legalistic and judicious manner.

By the way, if you do your homework properly before such termination of employment, you need not be bogged down by the fact that the spouse is a lawyer by profession or a very influential person, for that matter.

Regards.