Termination of a Permanent Employee
There are two ways of terminating the services of a permanent employee. One is by way of disciplinary action, i.e., if the employee has indulged in some serious misconduct. In this case, you need to issue a charge sheet and conduct an inquiry wherein full opportunity is to be given to the employee to defend himself through a representative of his choice. After the completion of the inquiry, the copy of the findings needs to be sent to the employee for his comments. Thereafter, you have to scrutinize if the findings are based on the evidence presented in the inquiry, both oral and documentary. Then, you need to check the past record of service of the employee. If you find that termination is legal and justified under the circumstances, then you can issue a detailed dismissal letter setting out the reasons for this termination.
Retrenchment Due to Surplus
Secondly, if the employee is rendered surplus due to various reasons, then you need to follow the provisions of the Industrial Disputes Act and put up a category-wise seniority list for display on the notice board for 8 days. Thereafter, you need to follow the principle of "last come, first go," i.e., the person who joined the organization last will be the first to go. You need to pay retrenchment compensation at a rate of 15 days' salary per completed year of service, one month's notice pay, and all other legal dues such as leave wages, earned salary, pro-rata bonus, etc., at the time of effecting retrenchment. You need to put up a general notice stating the reasons for the retrenchment and send a copy to the Government and the Labour Commissioner. You then have to draft an individual notice to the employee stating the reasons for the termination and attach the cheque for his legal dues, either serving it upon him or sending it by RPAD.