Termination by Employer without any reason/notice

July 9, 2020

In some stances/ circumstances, employees can be terminated/fired without any reason or notice or a warning, and in some cases, they cannot. It all depends upon the type of employment contract he is bound by. There exist two types of employment namely:

At-Will Employment – When employees are hired under this, employers can terminate/fire them for any reason or no reason at all. Thus, they can be laid-off without any warning. However, employees cannot fire at-will employees for discrimination or employees who are engaged in legally protected activities.
Contract Employment – It is a relationship whereby an employee agrees to work for the employer under his control and supervision. Employees who have signed an employment contract have greater protection than the above-mentioned category. It is considered wrongful if an employer fires him/her before the contract period expires.[1]

Categories of Employees

There are three main categories of employees according to various laws namely:[2]

Government employees.
Employees in Govt. controlled entities.
Private Enterprise Employees.

And there is no standard labour legislation in India for the protection of such workers.

Types of Termination

Termination under Contract

This happens in cases where employment is based on a contract and is set for a fixed period or by a mutual agreement. Unless a new contract is offered, the employee is considered terminated after such contract.

Termination by Law

This happens in cases where there exists a contract, but any termination must comply with the state and federal laws and thus it supersedes them.

Various State Legislations Governing Termination

Labour laws in Delhi- The Delhi Shops and Establishments Act,1954[3] says that an employee who has been with the corporation for more than 3 months cannot be fired without giving the employee at least 30 days of notice or a salary in place of such notice.
Labour laws in Maharashtra– The Maharashtra Shops and Establishment Act[4] says that an employee who has been with the corporation for more than 3 months but less than a year, shall be given at least 14 days of notice. This notice becomes of at least 30 days when an employee has been with the corporation for more than a year.
Labour laws in Karnataka & Tamil Nadu- The Karnataka Shops and Establishments Act, 1961[5] and the Tamil Nadu Shops and Establishments Act, 1947[6] says that an employee cannot be terminated if he has been with the corporation for more than 6 months, except for a ‘reasonable cause’. Further, an employer must provide 30 days’ notice. In case of misconduct, no such notice and payoff are required to be made.

Federal Legislation Governing Legislation

The Industrial Disputes Act, 1947[7] regulates Indian labour law so far as that concerns trade unions as well as Individual workman employed in any Industry. It extends to the whole of India.[8]

It applies to the workers employed in any corporation engaged in any manual, clerical, skilled, unskilled, technical, operational or supervisory work. It does not apply to persons engaged in managerial, supervisory or administrative roles.

The Act lays down two ways in which termination of an employee’s services can take place namely, ‘termination with a cause’ and ‘termination without a cause’. We will see provisions related to ‘termination without a cause’ only in this article.

Termination Procedures

Termination when there is a cause – When the employee is found guilty of theft, fraud, habitual late attendance, wilful disobedience, damaging the employer’s goods wilfully, etc.
Termination in the ordinary course – This demands a 30 days’ notice period. The employer will have to notify the relevant govt. authority and a fair hearing in the court.
Severance payment due – This is being calculated on a case to case basis. It happens only in case of ordinary terminations.

Termination Without Cause

The Notice Period must be given to an employee by an employer before the termination of his employment. An employer is required to supply a notice of termination, 30-90 days before the termination. The employer should clear all the dues and should make the following payments[9]. Such payments are called Severance payments.

Salary in place of notice when the notice has not been provided.
Unpaid salaries for the days worked.
Paid leaves encashment.
Gratuity payment to the employees who worked for more than 5 years or more.
Payment of the said bonus.
Any other dues mentioned in the contract.

If an Employee Is Terminated Without Receiving A Due Salary

An employee should send a legal notice to the employer. The employee must answer it by giving valid reasons as to his termination.
An employee should wait for a reasonable time after serving him the notice. In case of no response, he can file a police complaint and the police will then decide accordingly based on the investigation.
An employee can approach the District Magistrate with the police complaint if the police are unable to take any action. ROC should also be notified about the malpractices taken up by the corporation.
Generally, the issue gets resolved at this step. If not, then the employee can file a suit in Labour Court for the recovery of the said dues.

Wrongful/Unlawful Termination[10]

Implied Promises – If the employer has promised about the continued agreement, then the termination will be held unlawful.
Written Promises – If there is a written contract that promises you a job.
Breaches of Good Faith & Fair Dealing – If an employer acted unfairly.
Public Policy – It is illegal to violate public policy when terminating a worker.

Conclusion

It becomes very important for workers/employers to be not ignorant of their rights in the workplace. It is advisable to not enter any kind of a contract without reading the terms and conditions relating to the work. If the employer terminates/fires an employee in an illegal manner or without giving proper reasons or notice, then he has the right to approach the court of law.

Edited by Pushpamrita Roy

Approved & Published – Sakshi Raje

Reference

[1] https://smallbusiness.chron.com/can-employee-fired-warning-31282.html

[2] https://blog.ipleaders.in/employer-fires-an-employee-without-giving-due-salary/

[3] http://www.bareactslive.com/Del/dl166.htm

[4] http://www.bareactslive.com/MAH/MH253.HTM

[5] http://dpal.kar.nic.in/8%20of%201962%20(E).pdf

[6] https://indiacode.nic.in/bitstream/123456789/13171/1/tn-shops-and-establishments-act_1947.pdf

[7] https://mahakamgar.maharashtra.gov.in/images/pdf/industrial-disputes-act-1947.pdf

[8] https://en.wikipedia.org/wiki/Industrial_Disputes_Act,_1947

[9] https://yourstory.com/mystory/c051f7017c-employment-termination-without-reason-cause-or-pay