Reg. Termination Of An Employee

Dear Sir,
I have a doubt regarding terminating an employee citing business reasons. They have been good performers - but since the business is going down, we want to remove few employees. Can this be done?
Kindly note that I am a HR professional with a small company that is into Recruitment Services and IT at Hyderabad. Can you please clarify?
*PS: The company – is governed by the AP Shops & Est Act and has over 25 employees as on today.
Reg
Roopa

Dear Roopa,
Please check with appointment letter of candidates about the clause of termination of employee.
Work accordingly.

As per section 47 of the AP Shops and Establishment Act, 1988, termination of an employee shall not be done without reasonable cause. Bona fide of termination may have to be proved if challenged. However for employees who have put in more than six months shall be given one month's notice or wages in lieu theteof, and those who have put in not less than one year have to be given in addition 15 days average wages for every year's service. For those governed by ID Act, the retrenchment process has to adhered.If appointment letter provides better conditions than those then follow that.
Thanks
Sushil

what you are saying is not termination. its called retrenchment as per industrial disputes act. I hope termination/retrenchment/layoff will not come under shops and est act. it will come under id act.
for doing retrenchment, you are liable to settle their dues like gratuity, their notice period salary and leave salaries if any. put an 18(1) settlement between employer and that employee and settle it to avoid all legal issues in future.
thanks

When section 47 of the AP shops and est Act specifically provides for compliance of those conditions, the word retrenchment under AP shops and est Act does not come into play for employees other than workman who are covered under ID Act
Thanks
Sushil