Notice Period and Termination Policies
Notice pay or notice to be given by the employee to leave an organization or by the employer to terminate an employee depends upon the nature of the industry, the number of employees the establishment employs, and the functional responsibilities of the employee concerned. Any establishment falling under the scope of 'industry' that desires to terminate a worker shall give at least one month's notice. However, a factory or mine where 100 or more workers are employed should give three months' notice to terminate a workman. Therefore, the notice will depend upon the nature of the industry and the number of employees the establishment employs.
Notice or Payment in Lieu of Notice
Now, the notice or payment in lieu of notice also depends on the functional responsibilities of the employee concerned. When the law states that an employer is under a legal obligation to give notice to an employee who is covered by the Industrial Disputes Act, the same does not apply to an employee who is not a workman under the ID Act.
Who is a Workman?
A workman is one who does not have any functional responsibilities of a manager.
Who is a Manager?
An employee having supervisory and decision-making powers to whom some employees report is a manager. This means that in respect of employees having managerial powers, the employer can decide what the notice period should be. It can be one month, two months, or three months.
Application of the Industrial Disputes Act
In respect of employees who do not have any supervisory or managerial powers, the provisions of the Industrial Disputes Act will apply. As already pointed out, if an employer wants to terminate an employee, he should be given notice. However, there is no provision under any law that a workman should give notice to leave an employer. Simply put, in respect of employees not having supervisory roles, you cannot have a notice period or ask them to pay salary in lieu of notice if they want to leave. However, most companies have at least a one-month notice period, and the employees do follow it.
Notice period and payment in lieu of notice, therefore, should be in accordance with the law in force; failing which the same can be challenged, and then the purpose would not be fulfilled.