Is It Legal to Fire 10+ Employees Without Notice Due to Order Decline? Seeking Advice

Hi all,

I would like to get some advice regarding firing 10+ employees without notice. Is it possible to fire all of a sudden? Are we violating any policies/laws?

Please suggest to me how to terminate employees without notice. If there are laws in place, please share them with me.

Due to a decrease in orders for processing, we are unable to retain the employees, so we would like to terminate their employment.

Thank you.

When you fire someone without notice, you are violating all the fundamental rights of an individual and all the laws of this country. You need to follow the process of fair conduct of a domestic inquiry where the guidelines of the principle of natural justice are ensured.

I would like to ask a counter question: Would you like to be fired without notice?

Ethical Considerations in Employee Termination

"Please suggest to me how to fire employees without notice?"

Forum members are here to guide people in the right ethical way of sorting out problems. Do not expect honorable members to give you advice on actions that violate fundamental rights, ethics, and all industrial rules. If your firm/organization is not getting sufficient orders, please brief the workers, give them notice, and some time to look for alternative vocations/jobs. Suddenly terminating them due to business vagaries is a poor management and leadership style. Do not mind my frank words.

Dear Nathrao,

Meet individual employees one-on-one and clearly explain why the company no longer requires their services. Consider offering a golden handshake. First, carefully read the appointment letter. Check if they are confirmed employees or still on a probationary period. It is advisable to counsel them with the option of giving a one-month notice period in lieu thereof if such a clause exists in the appointment letter. Please share the following details for better guidance:

- What kind of organization are you in?
- What kind of employees are they?
- Is there any union or association?
- Is there any complaint against them?
- What are the employment conditions you agreed to at the time of appointment? Read the appointment.
- Is your company covered under the Standing Orders Act?
- Does a grievance redressal system exist in the company? How does the system fail to monitor the issues that force you to terminate their employment?

Thank you.

Apart from the advice provided by the aforementioned members, if your company is considering retrenchment, kindly type "retrenchment" in the Tab "WHAT YOU NEED" at the top of this page. You will find various views mentioned there. If you are open to receiving additional perspectives on retrenchment, please let us know.

Sir, You are an HR Manager. An HR Manager has to be a dual adviser. Please make this situation a win-win situation for both parties.

HR Managers as Advisors

HR managers are generally advisors only. The decision to hire or fire is made by top management. In such a situation, when a unilateral, shortsighted decision is taken—to fire 10 employees without considering explanations—the HR manager finds himself in a totally awkward position. If he quotes rules or laws, then his job will also be in danger. The management may decide to replace the HR manager with someone who will align with the higher management's directives. The fear of losses due to lower order status may have created panic in the mind of the decision-maker, leading to such decisions.

Navigating Crisis Situations

Now, someone mature and knowledgeable should be able to explain that lean times come and that if the workers are briefed about the financial position, they will understand things in a better light. The company can provide options such as reduced work hours and pay for a period or offering unpaid leave, etc. Essentially, the management will need to demonstrate leadership of a higher order to navigate through such crisis situations.

Regards.

Sometimes, a win-win situation requires many adjustments from both sides. Look at the news of Technip offshore firing 6,000 employees due to the same reason. Many companies do this and still in an ethical way, so there is nothing wrong in asking this question on the forum on how to do this.

It is not a good idea for a company (and also for employees) to give this bad news in advance when a big number of employees are involved. The mass disappointment can take very bad turns. Also, a big number of employees on a group notice period can be a big risk for the business at hand for the company.

If the reason is really 'lack of work,' then it is not 'all of a sudden.' I am sure employees are already aware that there is no work and some retrenchment is expected. The issue is, if you make it public news too early, then the performing staff will easily find another job, and useless staff will remain, to whom you cannot fire then. This affects what small business is available with the company.

So, sometimes it is better to not make this news public too early.

The only important thing is to compensate the employees with proper remunerations for the notice period or sustenance period, as per the contract. Even if this is not "required" as per the contract, considering the service received from these employees, you can think of additional benefits to cover this period for the employees' sustenance (like payment including HRA for the notice period).

Best Regards,
Amdo Bobade

Managing Business Ups and Downs

Business is known for its ups and downs. The vagaries of business are what make it unpredictable. Sometimes, during prolonged periods where orders are not forthcoming, a company may have to retrench. While retrenching is always painful, steps can be taken to reduce the pain.

Considerations for Retrenchment

- Laying off people closer to retirement and total newcomers can also be considered.
- Giving the workers as much advance notice as possible allows them to look around for jobs.
- Try to consider a VRS scheme or transfer to group companies if possible.

Value of Human Resources

People are the real resource for any company, and they should not be parted with so easily. Tomorrow, the situation may turn around, and skilled workers may not be available so quickly. Reskilling can be an idea to be explored.

Decision-Making in Downturns

Do not use temporary downturns as an opportunity to let people go. Make considered decisions and assess whether the company can weather the storm. It may be easy to let go in a crisis, but by holding on, workers will show double loyalty as they are aware that, despite the problems, the company was welfare-oriented enough to struggle but held on to people.

Alternative Approaches to Employee Termination

I really appreciate Mr. Nathrao's replies. As suggested by him in his third post, I would like to cite the example of Jet Airways. When things were going bad, it asked its cabin crew to take 10 days of unpaid leave in a month. In this way, the financial burden was shared by both the management and employees.

Indian Airlines also introduced sabbatical leave of 2 years to 5 years for its employees, without pay. The employees were assured that their inter-se seniority would be maintained. Many took advantage of this. Sacking employees outright just because business is down is very unethical.

Regards

With all due respect to the opinion, we should not forget that Indian Airlines is in debt and in very poor condition. Indian Airlines did not pay salaries to many employees for months but could not release them from duty due to government laws. This led to strikes, followed by a settlement.

Jet Airways and Market Challenges

Jet Airways grew significantly around 5 years ago, but they have never managed to provide proper service to their customers, even though they operate internationally. They have struggled to maintain their position in the market.

Retention and Employee Efficiency

Retention for the sake of retention restricts growth and makes employees lazy. Do you believe Indian Airlines employees would have worked with full dedication during their two-year tenure with another employer?

We can see this 'inefficiency' in every government sector today due to very strong job security rules.

As mentioned in the previous post, there is nothing unethical about firing employees if proper monetary remuneration is provided.

Best Regards,
Amod Bobade.

First, I want to appreciate Mr. Nathrao for his submission on the above thread. I also want to salute the way you explained the win-win situation with pros and cons.

Comment on the Thread Initiated by Mr. Satish

Satish ji, when a company does business, they do so with proper planning and budgeting. Every business experiences good months as well as lean order situations during each financial year. On average, companies operate profitably, which is why they continue in the market for the long run.

Every business encounters four situations: initiation, growth, maturity, and decline, as per management studies. In the maturity stage, every industry or business must focus on innovation; otherwise, there is a risk of becoming obsolete and experiencing a decline in business. Successful companies continuously grow because they address their weaknesses and resolve them before they lead to losses.

I don't know how old your company is, but the question you asked truly resonates with everyone in the forum. Understanding how to legally terminate employees can be learned from the ID Act of 1947 in the retrenchment section. However, it would be appreciated by everyone if you inquire about how to support our employees when the company loses its goodwill for obtaining orders from the wider market.

HR profession is a noble field where we can genuinely serve people and the nation. Therefore, it's important to follow the advice shared by Mr. Nathrao in the above thread.

Regards