Facing Sudden Client De-mobilization: How to Handle Employee Termination and Compensation?

Urgent Help Needed for Termination Process

I need urgent help regarding the termination process. We have employees working on the client side, and suddenly we are facing client de-mobilization. Without any notice, we have been told to remove the employees. Now, the business is unable to pay them any amount. We are ready to help them find a job elsewhere or provide an extended experience letter.

Queries Regarding Compensation and Termination

My queries are:

1) What is the legal process to follow for giving compensation, even though it is mentioned in the policy that employees can be relieved immediately or with deemed notice period (NP)?

2) I need to terminate one employee now by giving only one month's notice period since the client can de-mobilize at any time, and he is a loss to our business. In which category do both situations fall? Is it a layoff, or what kind of letter should I issue? Please help me with the letter format as well, if any.

You could have started your thread with some introductory note about your establishment so that the readers can have a better understanding of the problem raised by you with some unusual terms like "de mob" and "incapacitance." What is your establishment - is it a recruitment agency, a manpower supplier, or a contractor covered by the CLRA Act, 1970? I think it must be a manpower supplier or a contractor's establishment specializing in some particular operation.

Anyway, you are the immediate employer to the persons deputed to your client sites, and every such client is a principal employer. Therefore, the client cannot take any action by means of disciplinary action or otherwise against such employees deputed by you if their performance or behavior is not up to his satisfaction. The only way out is asking you for a suitable replacement. Then it is for you to decide whether to keep the employee by deputing him to some other client or dispense with his services once for all. If termination of the particular employee is your decision, it depends upon the terms of the contract of employment between the employee and yourself.