Terminating Managerial Staff: Is It Legal to Use the Notice Clause Without Inquiry?

In every service contract, there is a clause relating to the termination of service by which the service of an employee can be terminated by giving notice of a certain period or salary in lieu. As far as workmen are concerned, this clause cannot be used arbitrarily and is required to be preceded by an inquiry by resorting to the procedure prescribed in standing orders.

Can the service of an officer or managerial staff be terminated having recourse to this clause?

Termination of officer/management staff is possible. However, this should be done in accordance with the separation clause/notice period clause mentioned in the appointment order issued to that category of employees working in your company.

Termination of management staff solely based on the letter of appointment, following the Hire and Fire policy, is arbitrary. The employee and employer do not have equal bargaining power when signing the employment contract, making this unilateral clause illegal. This applies to both the public and private sectors.

Court Cases in Pune District Court
We had two cases in Pune District Court on appeal, where officers' services were terminated due to loss of confidence, with all dues, including gratuity, paid. The court ruled in favor of the officers, awarding them compensation. Now, the matter is before the High Court.