Hi, here I am sharing a very interesting case related to me. I am seeking your honest guidance.
Background of Employment
I was working in the India office of one of the top 3 Chinese companies as an Associate Director. I worked there for 15 months. Initially, I was hired on a third-party payroll. During my first probation period, the company was so happy with my performance that within 2.5 months, they decided to transfer me from third-party to the company's payroll. They gave me a one-month bonus just after four months of employment. Within six months from the joining date, they awarded me the 'Best New Joiner Award' (out of approximately 130 members), and just before this award, I was sent to China in January to train people there. After seven months, they gave me approximately a 20% increment and a two-month bonus. Everything was going well. I was presented as the best example to all employees across offices in India, China, Indonesia, and Russia. Due to my great performance and problem-solving approach (I solved several big issues and saved the company from several big problems, which was not part of my job profile), I was given several big tasks and new responsibilities.
Unexpected Termination
In October, an unexpected event occurred. I was supposed to attend a meeting to decide the next six months' targets for the entire team at 6:30 PM. However, just two minutes before the meeting, I was asked to meet the International HR Head and two other concerned persons. When I entered the room, within 10 seconds of the conversation, I was given a termination letter without any reason. I requested them to tell me the reason, but they refused. The International HR Head simply said that it is written in your appointment letter at Point No. 8B that your services can be terminated without any reason and at any time.
Rules Mentioned in the Appointment Letter
1. According to rule no. 8B, your appointment can be terminated by the company without any reason, by giving you not less than one month's prior notice in writing or salary in lieu thereof. For the purpose of this clause, salary shall mean basic salary.
2. According to rule no. 8D, the company reserves the right to terminate your employment summarily without any notice period or termination payment 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.
In my termination letter, rule no. 8B was mentioned.
Points to be Noted
1. They have given my salary for October, with unpaid leaves and probably the basic salary for November as well.
2. I do not care about money. I am worried about my image and respect. I have been in my industry for the last 18 years and have goodwill there. In my last two companies (both are two of the biggest brands in the industry), my resignation was never accepted due to my great performance and value.
3. The appointment letter was not given on the day of joining. It was given almost 45 days later.
4. When I got a call from the local HR person for the first time about the job offer, I asked about such conditions, and she denied them. Rule No. 8B was not mentioned in the appointment given by the third party, but when I got transferred from the third party to the company's direct payroll, it was mentioned. The appointment letter from the company (Direct Payroll) was given almost 45 days later, and the signature was backdated.
5. I have such a great image there that everybody is shocked and shattered. This incident has sent a message to all employees that if it can happen to me, it can happen to anyone at any time.
My Questions
1. Is it an ethical termination?
2. Can I sue them for wrongful termination?
3. Can I sue them for defamation because it has damaged my image in the industry? How can someone believe that a best performer was removed for no reason?
4. Although I signed the appointment letter and rule no. 8B is mentioned there, can it still be challenged in court successfully?
5. If I send a notice to them, can it backfire on me?
6. If the company does not disclose such termination clauses in writing at the time of offering the job, can it be challenged in court? If the company discloses such termination rules at the time of the job offer, no one would join them. It means the company is cheating employees. Employees have to sign the appointment letter because once they receive the job offer letter, they resign from their current company, and when they join this Chinese company, they are given this appointment letter with the termination rule, which employees cannot reject; otherwise, they lose both jobs. Due to this, the employee retention ratio is poor in this company's India office.
Hope for the correct response and guidance. Thanks.
From India, Noida
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Background of Employment
I was working in the India office of one of the top 3 Chinese companies as an Associate Director. I worked there for 15 months. Initially, I was hired on a third-party payroll. During my first probation period, the company was so happy with my performance that within 2.5 months, they decided to transfer me from third-party to the company's payroll. They gave me a one-month bonus just after four months of employment. Within six months from the joining date, they awarded me the 'Best New Joiner Award' (out of approximately 130 members), and just before this award, I was sent to China in January to train people there. After seven months, they gave me approximately a 20% increment and a two-month bonus. Everything was going well. I was presented as the best example to all employees across offices in India, China, Indonesia, and Russia. Due to my great performance and problem-solving approach (I solved several big issues and saved the company from several big problems, which was not part of my job profile), I was given several big tasks and new responsibilities.
Unexpected Termination
In October, an unexpected event occurred. I was supposed to attend a meeting to decide the next six months' targets for the entire team at 6:30 PM. However, just two minutes before the meeting, I was asked to meet the International HR Head and two other concerned persons. When I entered the room, within 10 seconds of the conversation, I was given a termination letter without any reason. I requested them to tell me the reason, but they refused. The International HR Head simply said that it is written in your appointment letter at Point No. 8B that your services can be terminated without any reason and at any time.
Rules Mentioned in the Appointment Letter
1. According to rule no. 8B, your appointment can be terminated by the company without any reason, by giving you not less than one month's prior notice in writing or salary in lieu thereof. For the purpose of this clause, salary shall mean basic salary.
2. According to rule no. 8D, the company reserves the right to terminate your employment summarily without any notice period or termination payment 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.
In my termination letter, rule no. 8B was mentioned.
Points to be Noted
1. They have given my salary for October, with unpaid leaves and probably the basic salary for November as well.
2. I do not care about money. I am worried about my image and respect. I have been in my industry for the last 18 years and have goodwill there. In my last two companies (both are two of the biggest brands in the industry), my resignation was never accepted due to my great performance and value.
3. The appointment letter was not given on the day of joining. It was given almost 45 days later.
4. When I got a call from the local HR person for the first time about the job offer, I asked about such conditions, and she denied them. Rule No. 8B was not mentioned in the appointment given by the third party, but when I got transferred from the third party to the company's direct payroll, it was mentioned. The appointment letter from the company (Direct Payroll) was given almost 45 days later, and the signature was backdated.
5. I have such a great image there that everybody is shocked and shattered. This incident has sent a message to all employees that if it can happen to me, it can happen to anyone at any time.
My Questions
1. Is it an ethical termination?
2. Can I sue them for wrongful termination?
3. Can I sue them for defamation because it has damaged my image in the industry? How can someone believe that a best performer was removed for no reason?
4. Although I signed the appointment letter and rule no. 8B is mentioned there, can it still be challenged in court successfully?
5. If I send a notice to them, can it backfire on me?
6. If the company does not disclose such termination clauses in writing at the time of offering the job, can it be challenged in court? If the company discloses such termination rules at the time of the job offer, no one would join them. It means the company is cheating employees. Employees have to sign the appointment letter because once they receive the job offer letter, they resign from their current company, and when they join this Chinese company, they are given this appointment letter with the termination rule, which employees cannot reject; otherwise, they lose both jobs. Due to this, the employee retention ratio is poor in this company's India office.
Hope for the correct response and guidance. Thanks.
From India, Noida
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I understand how difficult it is for a high performer like you to accept this reality. It is not at all an ethical practice (considering the facts that you have shared). However, if you go to court, there is no guarantee of getting a satisfactory resolution. It can also be time-consuming.
Contractual Terms and Legal Implications
The agreed contract itself states "your appointment can be terminated by the company without any reason, by giving you not less than 1 month prior notice in writing or salary in lieu thereof. For the purpose of this clause, salary shall mean basic salary," so they are right from a contract angle. How much the corporate guy invests in fighting a legal case if you go for a civil suit is something we cannot predict. Civil suits can divert your attention from your career for years, and the result can be in favor of you or the other party.
Internal Politics and Potential Risks
Maybe internal politics in your organization led you to get into this mess. So, they don't care if you press further to know the reason. One risk of getting into a legal dispute is matters like reference. You may not receive cooperation at a later stage.
Governance in Chinese Firms
What I have heard about governance in firms with head offices in China is a bit strange. Governance is centralized, and even your fingerprint data they will not allow to keep in local countries; they insist on storing it in the central server in their home country. I am not surprised by the kind of treatment you have received from a Chinese firm. They are good paymasters but do not expect freedom because it is difficult to change habits built on rules and supervision (and lack of trust).
Moving Forward
My suggestion is to forget this bad experience and join a good company. Your attitude and competencies will definitely help you grab a better portfolio than this. May God bless you.
From India, Bangalore
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202Contractual Terms and Legal Implications
The agreed contract itself states "your appointment can be terminated by the company without any reason, by giving you not less than 1 month prior notice in writing or salary in lieu thereof. For the purpose of this clause, salary shall mean basic salary," so they are right from a contract angle. How much the corporate guy invests in fighting a legal case if you go for a civil suit is something we cannot predict. Civil suits can divert your attention from your career for years, and the result can be in favor of you or the other party.
Internal Politics and Potential Risks
Maybe internal politics in your organization led you to get into this mess. So, they don't care if you press further to know the reason. One risk of getting into a legal dispute is matters like reference. You may not receive cooperation at a later stage.
Governance in Chinese Firms
What I have heard about governance in firms with head offices in China is a bit strange. Governance is centralized, and even your fingerprint data they will not allow to keep in local countries; they insist on storing it in the central server in their home country. I am not surprised by the kind of treatment you have received from a Chinese firm. They are good paymasters but do not expect freedom because it is difficult to change habits built on rules and supervision (and lack of trust).
Moving Forward
My suggestion is to forget this bad experience and join a good company. Your attitude and competencies will definitely help you grab a better portfolio than this. May God bless you.
From India, Bangalore
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The devastating impact on the character of a high-profile employee due to sudden termination without assigning any reason, based solely on an exit clause in the employment contract, can be understood by anyone with a basic sense of legality. Kindly refer to my reply dated 24-08-2017 in the thread "Can the management dismiss any of its employees by giving one month's notice without assigning any reason?" It would be advisable to consult an experienced advocate in service matters and consider filing a civil suit claiming damages for wrongful termination of employment based on a contract term that opposes public policy.
From India, Salem
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From India, Salem
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I feel it's all a matter of some hidden politics against you. Filing a case against the company may be a waste of time and energy in my view. This may also affect your BGV (Background Verification) when you join the next company better than this.
Integrate yourself and invest your positive energy in the right and new direction.
Regards,
Krishna Shukla
From India, Mumbai
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Integrate yourself and invest your positive energy in the right and new direction.
Regards,
Krishna Shukla
From India, Mumbai
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Dear Friend, your incident sounds horrible to me. Even then, I would agree with the suggestion of "Consultme." Mr. Umakanthan is a very senior member, and what he suggests on "legal grounds" is always a trustworthy comment. However, you, being an experienced person, should have thought about this beforehand when you were rewarded easily.
Performance Evaluation at Director Level
A company cannot judge someone's performance, especially at a director level, in just 6 months or a year. The earlier impression of your personality may have gotten you benefits, but you should have analyzed how the company's performance evaluation mechanism functions. I am not saying you received perks without any efforts, but reward and recognition come with time, not just through charm or past impressions.
Hiring Practices and Legal Responsibilities
Moreover, good companies do not practice hiring on third-party payrolls to avoid their legal responsibilities. Even at that time, you had a chance to understand their culture. Take this as a nightmare and move on with your career. Filing civil suits will only consume your time in this case, and you may feel harassed by court dates. You signed an agreement without pressure or coercion, so now you need to respect your decision for the sake of your time. Move on; life is about experiencing both good and bad things.
From India, New Delhi
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Performance Evaluation at Director Level
A company cannot judge someone's performance, especially at a director level, in just 6 months or a year. The earlier impression of your personality may have gotten you benefits, but you should have analyzed how the company's performance evaluation mechanism functions. I am not saying you received perks without any efforts, but reward and recognition come with time, not just through charm or past impressions.
Hiring Practices and Legal Responsibilities
Moreover, good companies do not practice hiring on third-party payrolls to avoid their legal responsibilities. Even at that time, you had a chance to understand their culture. Take this as a nightmare and move on with your career. Filing civil suits will only consume your time in this case, and you may feel harassed by court dates. You signed an agreement without pressure or coercion, so now you need to respect your decision for the sake of your time. Move on; life is about experiencing both good and bad things.
From India, New Delhi
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Termination from Employment.pdf