Can Employers in India Dismiss Employees Without Notice? Seeking Real Cases and Proofs

Dear Team,

Kindly provide me with exact details for my question with proofs of cases or incidents. Does an employer have the right to remove an employee without providing any type of notice in India?

Context of Employment

1. The employee is almost completing 2 years in the organization.
2. Upon joining, the employee agreed to the contract between the employer and employee in all aspects.
3. The employee performs well in all aspects of the organization.
4. The reason for the removal could be anything, such as asking for a higher salary or providing straightforward answers to the employer.

Best Regards,
Talluri Chakravarthy
[Phone Number Removed For Privacy Reasons], [Phone Number Removed For Privacy Reasons]

Employee Termination and Gratuity Considerations

If the employee is professionally competent and requests a salary hike or provides a straightforward answer, the company should consider it. There are still a few companies/MNCs in India that indeed pay gratuity along with the notice period amount if they need to close a contract or terminate an employee due to reasons such as no projects available with the company, for which the employee is not responsible. If the company provides such short notice, HR must provide in writing the reason for the immediate release. This practice is followed in almost all companies.

Termination Clause and Notice Period

Please refer to the termination clause of your appointment letter for the notice period or salary in lieu of the notice period for termination by either side.

Reasons for Termination

If an employee has to be terminated, there should be a reason behind it, and a proper domestic inquiry should be conducted. If the employee is found guilty of gross misconduct, the employer can terminate the service with immediate effect. Apart from that, the reasons you have mentioned are not appropriate for termination. You can challenge such termination in a court of law, but whether it will be worthwhile to do so has to be seen.

Legal Justification for Termination Without Reason

When an employer terminates an employee without any proper reason (if a reason is provided, it must be shown to the employee), is this legally justified? Can an employer dismiss an employee without providing a written reason? If so, can the employee take legal action against the employer?

Compensation Claims for Immediate Termination

If an employer terminates an employee immediately, can the employee file a lawsuit to claim compensation equivalent to six months' salary from the date of termination? The employee, along with their family, may face challenges in finding another job in society.

Please advise on any relevant cases or actions an employee can take against an employer.

Best Regards,

Talluri Chakravarthy

[Phone Number Removed For Privacy-Reasons], [Phone Number Removed For Privacy-Reasons]

Termination of Employment and Legal Considerations

No employer can terminate the service of any employee for asking for a salary hike or giving straightforward answers to the employer, as it does not amount to misconduct. Before termination, the employer must comply with the principles of natural justice, and the termination letter must contain a valid cause.

Illegal termination is subject to dispute under Section 2A of the Industrial Disputes Act, 1947, if challenged by the concerned employee. Employees can propose a salary hike but cannot force the employer to accept it. The proposal may be accepted or rejected at the employer's discretion. If a salary hike is accepted, the employer must comply with the provisions of Section 9A of the Industrial Disputes Act, 1947, as it is a change in service conditions.

As held in Union of India v. Madhusudan Prasad (2003), the Supreme Court found that the employee, who was found guilty in an inquiry, was not furnished with the inquiry report, and no show cause notice was served to him. In view of the facts and circumstances, the Court directed that an appropriate order should be passed regarding back wages. The appellate authority directed reinstatement and held that the employee was not entitled to back wages for the period he was out of service. The Supreme Court held that there was a fault on the part of the employer in not following the principles of natural justice. These factors were considered, and the lower courts ordered basic wages. The Supreme Court found no merit in the appeal and dismissed the same.

Thanks & Regards

V SHAKYA

HR & Labour, Corporate Laws Advisor

In addition to the above, you can even refer to the case of K. Ramesha vs. HCL Technologies wherein the Chennai court directed HCL to reinstate the terminated software engineer with full salary.

Thanks & Regards,

V. SHAKYA
HR & Labour, Corporate Laws Advisor

Notice, if any, will be as per the Terms of Appointment mutually agreed and accepted between the Employee and the Employer.

Whether the Employee falls under the definition of an Employee under Section 2(S) of the ID Act.

Whether the Service is governed by the Appointment Letter or Contract/Service Agreement.

Whether Standing Orders are applicable or Service Rules to the Employee.