Termination Due to Poor Performance: Are We Legally Required to Pay 3 Months' Salary?

If an employee is terminated from the services due to poor performance, is the organization supposed to pay 3 months' advance salary legally from the day of his termination?

The employee was given 15 days of PIP to improve performance, and when he failed to do so, he was relieved from his duties. He was handed all the documents and salary until his last working day.

Please let me know if there are any legal complications involved here.

Hi,

As per the terms of employment, he should be given a minimum of 1 month's salary even though a PIP was given 15 days prior.

This case appears prima facie illegal and unjustified if he is a 'workman' under the ID Act. For proven misconduct in the domestic enquiry held as per the law, for a dismissal, no notice period is required except that all his legal dues ought to be paid within the next working day. Instead of terminating as you did, would it not be better to have obtained his resignation? It is a win-win situation for both—you preempt legal exposure, and the employee leaves with no blot on his career.

Regards,
Vinayak Nagarkar
HR Consultant