Facing a Labor Court Case After Employee Termination: What Should I Do Next?

Hi Ankit, This is to inform you that I have terminated one of my employees from my factory due to his behavior and the resulting losses. Despite giving him several warnings, he continued to repeat the same mistakes. I have provided him with his due payment and a one-month notice period without deducting any losses from his salary.

The employee has now taken the matter to the labor court seeking additional compensation. I have already received a full and final payment receipt from him, which includes his signature and thumb impression.

Please advise on the appropriate course of action in this situation.

Thank you.

Documentation and Evidence

Did you record the warnings in writing and obtain the employee's signature upon receiving the warning? What was the nature of the mistake that was made? What is stated in the relieving certificate as the reason for the exit from the company? What specific misconduct was attributed to him? Was a show cause notice issued to him? What do your certified Standing Orders or the terms and conditions of the offer letter say? On what grounds is he requesting additional compensation? Willful damage or loss to the company is a strong basis for dismissal/termination. Can you demonstrate the loss caused by him? Further explanatory details are necessary to provide comprehensive answers to the inquiry.

By the way, your title is wrong.

An employee has filed a case against you in court. How can you call a legal action harassment? If it is a false case, it will be dismissed. If the company has followed due process and natural justice, there is no way the employee will win the case.

Before termination, did you conduct the domestic enquiry? If the enquiry was conducted and found fair in all respects, then courts generally do not interfere in the internal matters of the company. However, if the court observes that principles of natural justice were not followed, then the case could come up for a hearing, and you have to prove the grounds of the termination. It remains to be seen whether the courts are satisfied with the issue of warning letters and the fulfillment of the conditions of employment by way of payment of wages in lieu of the notice period.

Thanks,

Dinesh Divekar

As you said,

Understanding Termination

Termination from a job is actually the termination of the service/employment contract between two entities. If the employer has paid all dues as per the employment contract, then he cannot ask for more compensation. Termination does not allow him any handicap for more compensation.

Considerations on Termination Letters

What cause have you shown on the termination letter? From a humanitarian view, many companies ask for forced resignation or provide a termination letter without explicit reasoning or misconduct explanation.

If you have shown the reason for misbehavior without a proper domestic enquiry in place, then his discomfort is expected, and it may become a reason for scrutiny in this case.

Best Regards,
Amod Bobade.

Documents Required to Challenge the Labour Court

In the above case, the following documents you need to have to challenge the labour court:

1. Full and final settlement copy - Which the employee has signed (Did you take the signature of the employee on the F&F settlement letter?)
2. Warning letters - Duly acknowledged by the employee (Do you have acknowledged copies with you?)
3. Loss due to his mistakes (You have to prove that)

Normal Procedure to Follow

In a normal case, you need to follow this procedure:

1. Issue warning letters a maximum of 3 times.
2. Show cause notice - (Refer to the warning letters)
3. Frame the chargesheet.
4. Based on the reply, if you are not satisfied, suspend him pending inquiry.
5. Conduct a domestic enquiry - You have to prove that the employee has been continuously committing the loss with documentary evidence.
6. Based on the enquiry report, you need to take action.

This is the normal procedure. In your case, you have terminated him without following the above procedure, which may not be correct. The labour court may direct you to reinstate the employee.

Questions to Consider

My questions are:
1) Have you issued any termination letter?
2) Did you take the resignation letter and settle the account?

In the first case, you may lose the case, and in the second case, there is a possibility that you can produce the resignation letter and say: since the employee has resigned, we have done his final settlement (Also produce the final settlement copy duly signed by the employee).

Regards