Can We Terminate an Employee for Non-Performance? Understanding Labor Law Clauses

Hi everyone! I am working in a middle-level company with an employee strength of 100 employees. Kindly let me know what the labor law clauses are that we need to follow if we terminate any employee on grounds of non-performance. Can we actually do that, and how? Please help.

Dear Aastha, you could provide a little more information about the employee you want to terminate. What type of job does he do? How many years has he worked? Have you provided any training to augment his performance? Did his manager provide him with any support to elevate his performance? Was his performance good earlier but has lately nosedived?

Before terminating, you need to conduct a domestic enquiry. In the enquiry, you need to give the employee a chance to defend his case. If non-performance is proved during the enquiry, then you may take disciplinary action, which could include termination of employment.

Another factor worth considering is beyond your query. Taking action against an under-performing employee is fine, but was it a wrong recruitment? If yes, then who is responsible for the wrong selection?

Thanks,

Dinesh Divekar

Hi Dinesh, Sure. He is a sales associate. It's been 8 months since he started working in our organization.

Sales Associate Performance and PIPs

I have a domestic call center that sells insurance policies. These sales associates are provided with monthly targets that they need to fulfill. The numbers they meet in relation to their targets indicate their level of performance. Anyone who fails to meet the targets is put on PIPs - Performance Improvement Plans. The first PIP lasts for 1 month, and the second PIP is for 2 weeks. Those who fail in both PIPs are asked to leave due to non-performance.

Regarding this employee, he has failed in both PIPs, and the data regarding his reports has been shared with him.

Training and Performance Challenges

Please note - These sales associates are first put through training sessions that include sales and product training, lasting a minimum of 2 weeks. While his performance has always been average, he is now failing to meet the targets.

Primarily in sales, each employee is judged based on their targets. The attrition rate is quite high among them as the pressure to make sales is significant.

Notice Period for Termination

So, if we need to ask any sales associate to leave, what should be the notice period we provide to them, considering the labor laws of the country?

Please help.

Regards, Aasthaa

Please study the Industrial Employment Standing Orders Act. You will find answers.