Termination During Probation: Does the Company Owe 30 Days' Salary Without Notice?

Dear All,

I want to confirm if a company terminates an employee during the probation period, is the company liable to pay 30 days' salary if they don't want the employee to serve the notice period?

Vaishali

Dear Vaishali,

Yes, the company is liable to pay if it is mentioned or included in the appointment contract. So please check and follow the same.

If we mention in the probation period that if terminated, no salary will be given for 30 days, is that in line with HR law?

Vaishali

Hi,

If you mention a clause for non-payment in the case of termination of a contract, it will be effective from both sides. If an employee breaks the contract, they are also not liable to pay any amount as a penalty towards the notice period.

Whether you have to pay 30 days' notice pay or not in the event of you terminating an employee's service depends upon the terms of the letter of appointment. So please check it. However, if the clause stipulates that both the employer in case of termination and the employee in case of resignation need not give notice period, then you are not required to pay any notice pay. Please check the language of the clause in the letter of appointment.

B. Saikumar
HR & Labour Relations Adviser
Navi Mumbai

Well, what we do is always pay employees for 30 days if we terminate them, whether in probation or permanently. However, I want to check if it is compulsory to pay an employee 30 days' salary if we terminate them during the probation period. Based on this, the HR department can revise the appointment letter for all future recruitments.

Vaishali

Then you can say with regard to termination during the probation period as follows:

"However, the employer can terminate the service of an employee during probation without notice, and the employee can resign from the service without notice during probation."

Saikumar

Okay, so that means I have to give the liberty to an employee in probation to leave without serving the notice period, which I didn't want. However, I want to do things that don't go against HR norms.

Employment Contracts and the Contract Act 1872

Employment too is a contract and is subject to the provisions of the Contract Act 1872. A contract is binding on the parties if the terms are accepted by them without any coercion. So, the question is whether an employment contract that stipulates a clause more favorable to the employer is enforceable? I do not envisage any problem with this if the said clause is accepted by the employee of his own free will.

Termination Clauses and HR Norms

Your statement that you want a favorable clause on termination but don't want to do anything against HR norms made me stretch the discussion beyond the sphere of the contract. I examined whether there is any employment law governing the same issue and, if so, whether it impacts such a clause.

Shops and Establishments Act

Normally, the Shops and Establishments Act of the States contains a clause on termination which requires an employer to give notice of a certain time (usually 30 days) to an employee in case of terminating his services. It is prudent to keep the termination clauses in tune with that in the Shops and Establishments Act to avoid any conflict. So, please check the Shops Act of your State if your establishment is covered by the said Act.

Regards, B. Saikumar HR & Labour Relations Adviser Navi Mumbai

Understanding Probationers

We need to understand what a probationer is in general. When a person is employed but placed on an observation period, it can be considered a trial period to assess their performance in that job or position. If their performance is satisfactory, they are confirmed as an employee of the organization.

In general, the probation period can be considered a contract for the specified time mentioned in the appointment letter. The confirmation depends on their performance during this period; otherwise, the employment is terminated upon completion of the period. Non-confirmation for the job cannot be treated as termination. It depends on the text mentioned in the appointment letter of the probationer. Are the probationers informed about their performance during the period or through counseling sessions? It is essential to raise an alarm, as there is often misuse of probationers.

Dear colleague,

According to industry practice, during probation, it is stipulated in the appointment letter that services can be terminated by either party without prior notice or wages in lieu of notice.

It has been your standard practice to provide a 30-day notice by either party for termination. Therefore, you must either give notice or provide notice pay if you wish for the individual to leave immediately.

Regards,
Vinayak Nagarkar
HR Consultant

I am currently working during my probation period, and 11 months have been completed. However, this month I was on leave for 5 days due to personal reasons and health issues. The company terminated me without any prior information and did not make any entry in the company system. What should be my next step? Am I eligible for a bonus, one month's salary, or a notice period? Please help me urgently.