Terminated Just Before Permanent: Can I Get Compensation from My Start-Up?

I'm in need of some urgent advice. I'm working with a start-up on probation for 6 months. I've received a termination email with no prior intimation or dissatisfaction just 2 weeks before becoming permanent.

Notice Period and Compensation

1. The notice period is 2 months in my offer letter by either party.
2. No bonus was paid out during probation.
3. Is the company liable to pay compensation or not?

What is the separation clause in your appointment letter during the probation period? Please check it.

Hello, you may terminate your employment with the Company by giving not less than 2 months' prior notice.

(ii) Further, your appointment can be terminated by the Company, with the reason in writing, by giving you not less than 2 months' prior notice in writing or salary in lieu thereof.

(iii) The Company reserves the right to terminate your employment summarily without any notice period if it has reasonable grounds to believe that you are guilty of misconduct or negligence, or have committed any fundamental breach of contract or caused any loss to the Company.

(iv) On the termination of your employment for whatever reason, you will return to the Company all property, documents, and papers, both original and copies thereof, including any contracts, records, lists, drawings, blueprints, letters, notes, data, and the like, and Confidential Information, in your possession or under your control relating to your employment or to clients' business affairs.

Thank you for your response.

Clauses in the Offer Letter

As per the offer letter, these are the clauses. Any advice would be helpful, as the company does not have an HR department. The communication seems one-sided, with no positive response given when asked about an exit interview or reasoning.

Please feel free to reach out if you need further assistance.

Termination and Compensation During Probation

As per the separation clause no. (iii), the company reserves the right to effect termination without any notice period, during the probation period or after completion of the probation period. Hence, the company will not provide any compensation.

It is, therefore, advised in your own interest to hand over any items belonging to the company that are in your possession and aim for a smooth and clear exit.

Entitlement to Bonus

Legally speaking, if you have worked for at least one month, you are entitled to receive your applicable bonus.

Thank you very much for the prompt response. The clause mentions that if there's reasoning, it's true. I have worked hard, and no one has expressed any disappointment or negative reviews to date. This termination was totally unforeseen; I have only received good feedback until now.

Being jobless all of a sudden, a notice or compensation would help in applying for and finding a job. Is there any way out?

As per Clause III, employment can be terminated without any notice for "misconduct or negligence, or having committed any fundamental breach of contract or caused any loss to the Company."

So, have you engaged in any of the above acts?

Compensation and Termination Clauses

The question of compensation will not arise because you have not worked for 240 days (over a period of 12 months in the preceding year). However, the appointment order clearly states that termination should be on the basis of any reason, with a notice of two months or payment in lieu of notice. In the absence of any misconduct, the termination should be with notice only. Even this clause will not legally stand because termination due to misconduct is stigmatic. Before initiating such termination, if the employee concerned is not given an opportunity to be heard, such termination will be bad in law. Therefore, just including a clause that without notice one's employment shall be terminated for any misconduct will not be maintainable.

Termination During Probation

Still, the employer can put a clause in the appointment order that "during probation, the employment shall be terminated without notice and without assigning any reason thereof." In such a scenario, you should never show any "reason" for termination. If you give any reason, then the employee should be given an opportunity to defend the charge or reason.

In my opinion, the second clause will require that two months' notice or two months' salary in lieu of notice should be given to the employee in this case.

Thank you for all your advice. The 30th is my last working day. The company has even blocked email and all other access since Monday, the 27th, without any intimation. This is so humiliating.

With a family to support, how inhuman is this behavior? There has to be some law to proceed with in my case. I would be thankful if I can get any help or information on this.