Employee Termination Before Probation Ends: Is Our Final Settlement Fair and Legal?

Employee Termination and Final Settlement Issue

There was an employee in the organization recently appointed to the designer post who has 4-5 years of experience. As per our company policies, we have a three-month probation period, after which we conduct a probation review. We do not have any training period as we are a start-up company with a very limited/small group of 8 employees.

Since the commencement of work, the designs produced by this employee have been rejected by the client. We have had discussions from the management end and with the client regarding his designs, and we are in need of significant improvement. Despite the employee's best efforts to deliver quality work, he has been unable to satisfy the client. The client requested a replacement as they were unhappy with him. Due to his high salary, we could not afford to retain him, and the directors decided to terminate his employment. We discussed with the employee about resigning, and after he agreed, we proceeded with his termination.

Here are some details for clarity:

Date of joining: 1 March 18
Date of resignation: 24 March 18
Final settlement as decided by the directors: Only for 15 days

The final settlement amount was communicated to the candidate, and he is unhappy about it. The policy did not mention such deductions. The candidate argues that he worked for the entire 24 days and should be compensated for those days as well. However, the directors have decided to pay him only for the work approved by the client, not for the rejected or pending work. The directors are firm in their decision, stating it is a loss for the company.

I need immediate assistance in handling this situation. Is the decision taken correct or wrong? Are we following the right and legal procedures? If further details are required, please let me know.

Regards,
Aishwarya
Jr HR

Legally, he is entitled to 24 days. He has worked and produced designs, and so he cannot be left unpaid for days of work. Appraise the Board of Directors of the rule position and let them decide. The employee may choose to go the legal way and demand his dues.

It is really painful to learn that your establishment failed to pay the wages for his working days. It hurts even more when your management releases only 5 days' pay, even after suggestions from senior members of the community. Do not forget that you are still under scrutiny as you did not fully disburse the wages. The staff was not asking for an extra favor; rather, he is asking for 24 days' wages for which he put in sweat and strain. Keep in mind that no start-up company should engage in small issues that can hinder future progress. This type of message is tarnishing the image of your establishment, don't you think? As you sow, so shall you reap.

Hi Aishwarya,

You need to pay him his total wages. Whether the drawings are correct or not, he is eligible for wages since he put in his efforts and provided services to the client on behalf of the company.

You can inform the associate that the company is ready to provide 19 days. If he agrees, pay him promptly. If he denies the offer, then check if any leaves were taken within those 24 days. If so, inform him and deduct those days from the total payment. Otherwise, you will have to pay for the entire 24 days at some point.

Make sure to inform management that proceeding legally could lead to more problems. As a startup, you must handle such situations or adhere to the relevant acts and rules.

Evaluating Employee Termination Decisions

Yes, a good query really suits all others as well. Two direct attacking points in the problem:

1. Though that skilled employee didn't get satisfactory approval from one client, does it mean he is unfit for your company? The policy matter decided to remove him at once. Is it correct? If one client failed, suppose another client may say okay. First, think he is your permanent employee. Honor him and his total efforts to convince his customer. It is not as easy as when one cricket player fails; he will not play the next match. But all private companies think like this: only a successfully performed worker succeeds in the job.

2. The point is incomplete - probation removal by force. Yours is like an artistic unit. A musician with good performance only shines in any musical concert. Like that, in performance-oriented job categories, this usually happens. Removals are so common for failed ones. So, convince the management to provide full payments for all working days. If not, convince the employee by reminding him of his total failed performance that dissatisfied management. Reveal to him that this type of target-oriented, customer satisfaction-targeted job decides the future of the company, so tough rules are laid. Hence, nominal payments are done to him. At last, if he does not calm down, the management has to pay as per termination rules laid by your company or labor laws of the land.

Thank you, Gannahope, for your feedback. We were under pressure from the client to replace the candidate, or else we would lose the project. Being a startup, we could not afford to hire another candidate for the same position, especially since the current one was highly paid. Therefore, we had to make the tough decision to terminate the employee. While we acknowledge that not paying full wages is unfair on our part, the directors decided to do so even after I informed them about the legal complications. As a result, the final decision was made to pay the employee for 19 days instead of 23 (including his Loss of Pay). That was the best I could ensure from my end, and the candidate agreed to this arrangement. Hopefully, we will not encounter such situations again.

Okay, Aiswarya ji,

Try to pacify the employee as much as you can. If it is impossible, tell the management to prepare for a legal dispute, which is always a headache. Buying mental peace is always opted by any senior gentleman nowadays. Pay all. Remove one (i.e., headache).