Termination without notice - employee who misbehaved - could we do the same or there could be any legal issue?

Dear Seniors,

I need your guidance on the following issue. We have an employee who misbehaved this morning. I have given several warnings, and his HOD has also spoken with him regarding his behavior. Unfortunately, we have not seen any improvement, and now management is considering terminating him with immediate effect.

Please advise if we can proceed with the termination, or if there could be any legal issues following the termination.

Thank you.

Dear Archi,

Most probably, the delinquent must be an employee falling under the category of workman under Section 2(s) of the Industrial Disputes Act, 1947. If so, instantaneous termination of his services without following the principles of natural justice would be illegal and could later be set aside in judicial scrutiny.

Therefore, pending the enquiry, place him under suspension forthwith, frame specific charges of misconduct under the service regulations, conduct a domestic enquiry giving him a reasonable opportunity to defend himself, and upon receipt of the enquiry officer's findings, issue a second show cause notice about the proposed punishment of dismissal, and then dismiss him.

Looks cumbersome? Yes, but you have to do such things.

Hi, Sir,

Thank you. I also want to know who could be part of that inquiry. Should it be internal, or do we need to call someone from the labor department?

Dear Archi,

The enquiry officer can be anyone - i.e., someone from within the organization belonging to a superior cadre and not connected with the episode of the alleged misconduct, or an outsider like an advocate or any other person well-versed in enquiry matters. You cannot engage the services of an official from the labor department who is currently in service.

Thank you.

Dear Archi,

You can terminate by paying the notice pay as per the terms of the appointment without showing the cause as misconduct, rather exhaustion of position or some other issues would be more suitable. Also, do not fill the vacancy that emerges from the termination for some period.

How long has the delinquent employee been working in your company?

As Umakanthan sir suggested, it would be better to follow the procedure to ensure your company is free from any encumbrances. The EO (enquiry officer) should ideally be a registered legal practitioner. The Presiding Officer and the MR (Management representative) can be any two managerial personnel. Similarly, the delinquent workman can be accompanied by a co-workman throughout the enquiry proceedings.

If the delinquent is a probationary employee, you can give one month's extra salary and terminate him, as suggested by Mr. Prabhat Ranjan. If he is a confirmed permanent employee, please follow the procedure as stated by our learned senior member Mr. Umakanthan.

Dear Mr. Prabhat Ranjan,

I am concerned about whether your suggestion, if implemented and challenged by the employee, would withstand judicial scrutiny. What you have proposed must either be a discharge simpliciter as per the employment contract or retrenchment under Section 2(oo) of the Industrial Disputes Act, 1947. In any scenario, the employer would be required to provide retrenchment compensation for the completed years of service contributed by the employee. In the event of retrenchment, the employee should be the most junior, and if the workforce comprises 100 or more employees, prior approval must be sought from the relevant Government authority.

Dear Umakanthanji,

What was suggested was on the ground of terms and conditions, i.e., either party can terminate the agreement by serving notice or by paying in lieu of that. One must follow the proper procedure when termination is due to misconduct.

Dear Archi,

The advice given by Mr. Umakanhan is perfectly legal and should be followed before taking any serious action such as termination.

However, if you require immediate termination, there is another option that is not entirely foolproof. If you possess concrete documentary evidence of the employee's misconduct, including past instances and warning letters on record that demonstrate ample opportunities for improvement, you can create a detailed file noting the chronological events/history of the misconducts and actions taken over time. This documentation is crucial and should be prepared in collaboration with a labor law expert.

Following this, issue a termination letter in accordance with the employment contract, effective immediately, along with payment for notice period and all legal dues. It is advisable to mention in the termination letter that if the termination is legally challenged, you will provide all evidence in support of your decision.

It is important to reiterate that this course of action should only be pursued if you are confident in the evidence supporting the termination, as verified by a labor expert, in case of legal challenges in the future.

While I generally advocate for adherence to established legal procedures, if you are certain and willing to take the risk, you may proceed with this approach in consultation with a lawyer.

Regards,

Vinayak Nagarkar
HR and Employee Relations Consultant